Over a month after placing the Ethereum coin-mixing tool Tornado Cash under sanctions, the U.S. Treasury Department announced a way for Tornado Cash users to recover their funds on Tuesday.
See related article: Tether says didn’t freeze sanctioned Tornado Cash addresses so as to not interfere in investigations
Fast facts
- The new guidance provides a way for users to lawfully withdraw their funds from the private transaction application by applying for an OFAC license, an authorization from the Office of Foreign Assets Control (OFAC) to engage in a transaction that would otherwise be prohibited.
- There is currently about US$174 million left sitting in Tornado Cash’s smart contract, at the time of publication, according to DefiLlama. Some of those funds likely belong to users who are worried about the legal repercussions of withdrawing them.
- Six plaintiffs with funds in Tornado Cash filed a lawsuit against the Treasury Department last Thursday, arguing that the sanctions had frozen their lawfully deployed assets- a case that may be affected now that there is an available avenue to withdraw funds.
- Following the initial sanctions announcement, anonymous users protested by ‘dusting,’ or sending various crypto wallets a small amount of ETH through Tornado Cash, including those of high-profile celebrities. OFAC’s regulations would apply to these transactions, but the OFAC will not “prioritize enforcement” concerning this matter, the guidance stated.
- The Tornado Cash website went offline after the sanctions, but the Tornado Cash app can still be accessed through other means. Engaging in any transaction with Tornado Cashs remains prohibited for U.S. persons.
See related article: Alleged Tornado Cash Developer Alexey Pertsev to stay in jail