The U.S. Department of the Treasury announced on March 21, 2025, that it has removed economic sanctions against Tornado Cash, the cryptocurrency mixing service that was under U.S. sanctions since August 2022.
The decision comes after a November 2024 ruling by the U.S. Fifth Circuit Court, which found that the Treasury's Office of Foreign Assets Control (OFAC) had exceeded its authority when sanctioning the cryptocurrency mixer. The court determined that Tornado Cash's smart contracts could not be classified as "property" under existing laws.
As part of this action, over 100 Ethereum wallet addresses linked to Tornado Cash will be removed from the Specially Designated Nationals list, ending nearly three years of restrictions that made it illegal for Americans and U.S. businesses to transact with the platform.
Treasury Secretary Scott Bessent acknowledged the need for balance in regulating digital assets while expressing ongoing concerns about illicit activities. "Digital assets present enormous opportunities for innovation and value creation for the American people," said Bessent, while noting the continued threat from North Korean state-backed actors.
The platform, which operates on the Ethereum blockchain, allows users to conduct anonymous transactions by obscuring the origin and destination of funds. Since its launch in 2019, Tornado Cash has processed approximately $7.6 billion worth of Ether, with nearly 30% of transactions linked to illicit actors.
Despite lifting the sanctions, legal action continues against individuals associated with the platform. Tornado Cash co-founders Roman Storm and Roman Semenov face criminal charges in the U.S., while another key figure, Alexey Pertsev, received a prison sentence in the Netherlands.
The Treasury's reversal marks a shift in regulatory approach, moving from targeting platforms to focusing on individual actors who exploit them for illegal purposes. The department maintains its commitment to combating cryptocurrency-related crime, particularly North Korean hacking operations aimed at funding weapons programs.