Crypto

U.S. Treasury Replies to Concerns Regarding Sanctions Against Tornado Cash

In this regard, the OFAC published new details in its frequently asked questions section, where it indicates that US residents affected by the measures against TornadoCash they will be able to recover funds blocked there, as long as they request the respective license.

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  • OFAC clarifies doubts about what happened with TornadoCash
  • Indicates that those affected will be able to recover their funds if they request a license
  • For this, they will have to justify why they used the tornado caseh
  • OFAC invites residents and businesses to comply with the sanctions imposed

The events that occurred with TornadoCash They generated a lot of controversy inside and outside the ecosystem of digital currencies, but they also left in their wake many doubts about the course to follow, especially for all those who were affected after the measures taken by the Treasury Department against the service for the mix of transactions.

However, the Office of Foreign Assets Control (OFAC)agency attached to Treasury Department, published in his document frequent questions” (FAQ) some information of interest to all persons and entities interested in what happened with Tornado Cash, where it offers some guidelines to follow as the case may be.

Americans will be able to recover funds blocked in TornadoCash

One of the most frequently asked questions has to do with the funds blocked in Tornado Cash, to which the OFAC clarified that all those interested in recovering their assets trapped in said site can apply for a license to get them back.

In this regard, the document reads:

“U.S. persons should be prepared to provide, at a minimum, all relevant information regarding these Tornado Cash transactions, including wallet addresses for the sender and recipient, transaction hashes, date and time of transaction(s), as well as the amount(s) of virtual currency. OFAC would have a favorable licensing policy for such applications, as long as the transaction does not involve other sanctionable conduct.”

The clarification comes to place after the lawsuit filed against the Treasury Department by a group of affected people after the sanctions against Tornado Cash, which were backed by the US-based international exchange, Coinbase. The people argued that the government agency did not have the legal right to issue the sanctions applied given the nature of the service for the privacy of transactions, because it is fairly decentralized and open source, instead of appearing as an entity, person or organization.

Although there is no response to such allegations, at least the OFAC and the Treasury Department They point out that those affected will be able to recover their funds as long as they comply with the above. They also allay some concerns for those who have received funds associated with Tornado Cash, clarifying that it is not necessary to notify the agency as long as it is small amounts not requested.

Residents must refrain from operating with sanctioned services

Another point on which OFAC placed special emphasis is the prohibitive nature of the measures taken against Tornado Cash, so residents and companies operating in the US must refrain from using this type of service.

In this regard, an OFAC spokesperson reiterated what was stated above and called on the crypto industry on behalf of the entity, so that it has an attitude more attached to good practices:

“Americans must comply with these sanctions. More broadly, we call on the cryptocurrency industry to do its part to prevent illicit activity, whether as a nation-state or otherwise, as that is what ‘responsible innovation’ requires… This would include ensuring adequate cybersecurity measures, implementing know-your-customer measures, and complying with anti-money laundering obligations and sanctions. Treasury looks forward to continuing dialogue with the virtual currency industry on these issues.”

Let us bear in mind that the OFAC blacklisted addresses associated with TornadoCash after determining that the North Korean hacker organization, Lazarus Group, made use of the service to erase traces of funds associated with illicit acts. The regulator’s report assured that at least 20% of the funds that passed through there were linked to crimes and financial malpractices.

The actions taken by OFAC were only a small part of the hype generated, as this was followed by actions by entities both inside and outside the crypto space against TornadoCash and his work team. Notable among these is the blocking of funds in USDC tax by Circle, as well as the arrest of its main developer in European territory.


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Article by Angel Di Matteo / DailyBitcoin

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WARNING: This is an informative article. DiarioBitcoin is a means of communication, it does not promote, endorse or recommend any investment in particular. It is worth noting that investments in crypto assets are not regulated in some countries. May not be suitable for retail investors as the full amount invested could be lost. Check the laws of your country before investing.

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