Ethereum cofounder Vitalik Buterin has said he used Tornado Cash to donate to Ukraine, little more than a day after the U.S. Treasury Department blacklisted the crypto mixing service for its facilitation of money laundering. 

Buterin’s comments were in response to a tweet by Jeff Coleman, cofounder of a startup called Counterfactual, who said such a donation is a “great example of a valid need for financial privacy” that Tornado Cash could facilitate. 

“Even if the government where you live is in full support, you might not want [the] Russian government to have full details of your actions,” Coleman said. 

The Treasury Department’s Office of Foreign Assets Control (OFAC) added Tornado Cash to its Specially Designated Nationals list on Monday, effectively banning all persons and entities from using the service.   

The OFAC claimed Tornado Cash had laundered more than US$7 billion worth of cryptocurrency since its creation in 2019. 

Crypto mixers are services that allow users to feed crypto into a large pool and withdraw the same amount — minus a fee — to multiple wallets to obscure the sources of the original tokens. 

Advocates for crypto mixers claim that not all funds that go through the services are illegal and some, including director of research at Coin Center Peter Van Valkenburgh, have gone so far as to call the ban unconstitutional. 

At a presentation at ZCON3, Valkenburgh argued that banning software publication is a restriction on speech and is therefore unconstitutional, as is banning otherwise legal transactions made to maintain one’s own privacy for political purposes.

People within both Russia and Ukraine turned to cryptocurrency as a store of value as both nation’s currencies took a significant downturn directly following Russia’s invasion. 

Within Ukraine, activists and volunteer groups have been using cryptocurrency to crowdsource donations to help fund a defense against the Russian invasion as the country’s financial system is heavily strained.

Recognizing crypto’s potential to help Ukraine’s defense and humanitarian efforts, Ukrainian President Volodymyr Zelenskyy signed a virtual assets bill in March that legalized cryptocurrency.

Buterin said that his intent in using the service was to protect the recipients, not himself, as the government of Russia — the country of Buterin’s birth — was already aware of his position on Ukraine. 

A recent report on crypto mixers by data aggregation firm Chainalysis found that the amount of funds sent to crypto mixers had hit an all-time high of US$51.8 million in April this year. 

In an interview with Forkast last week — before the OFAC’s decision — Kim Grauer, Head of Research at Chainalysis, said she believed it was only a matter of time before lawmakers stepped in.

“Because of just the gravity of the situations and the bad actors involved, it’s really become almost a no-brainer that law enforcement has to grapple with this issue,” Grauer said.

The Chainalysis report recommended that any regulation needs to strike a difficult balance of protecting the right to digital privacy they offer while addressing their clear utility to illicit activity.