Key Takeaways
- The U.S. Treasury has lifted sanctions on Tornado Cash after a legal review.
- Tornado Cash was previously accused of helping North Korea launder over $7 billion.
- The Treasury reaffirmed its focus on curbing digital asset abuse by state-backed hackers.
The U.S. Treasury Department on Friday announced the removal of economic sanctions against Tornado Cash, the cryptocurrency “mixer” accused of laundering over $7 billion in illicit funds, including money linked to North Korean hackers.
Legal & policy review
The reversal came after a legal and policy review of financial sanctions applied to emerging technologies.
In a March 21 court filing in Van Loon v. Department of the Treasury, the administration acknowledged the complexity of enforcing traditional sanctions within evolving digital ecosystems.
Background on Tornado Cash
Tornado Cash had been blacklisted in 2022 by the Office of Foreign Assets Control (OFAC) for allegedly aiding the Lazarus Group, a North Korean state-backed hacking entity, in laundering over $455 million.
Legal challenges
Legal pushback followed, with six Tornado Cash users—financially supported by Coinbase—filing suit against the Treasury.
In November, a U.S. appeals court ruled that OFAC had overstepped its authority, though the sanctions initially remained in place.
Ongoing concerns
Despite lifting the ban, Treasury officials emphasized continued concern over North Korea’s use of digital assets to fund its weapons and missile programs.
The department stated:
We remain deeply concerned about the significant state-sponsored hacking and money laundering campaign.
Statements from Treasury Officials
Treasury Secretary Scott Bessent added:
Securing the digital asset industry from abuse by North Korea and other illicit actors is essential to establishing U.S. leadership.
Legal consequences for co-founders
Tornado Cash’s co-founders face separate legal consequences.
Roman Storm awaits trial in the U.S., and developer Alexey Pertsev was sentenced last May in the Netherlands to over five years for money laundering.
