U.S. Treasury Lifts Tornado Cash Sanctions Amid North Korea Money Laundering Probe

Summary: The U.S. Treasury Department has lifted sanctions against Tornado Cash, a cryptocurrency mixer previously linked to laundering money for the North Korean Lazarus Group. This decision follows a Fifth Circuit court ruling that questioned the authority of the Treasury’s Office of Foreign Assets Control (OFAC) to sanction entities like Tornado Cash, which utilizes immutable smart contracts. Despite the sanctions removal, the Treasury emphasizes its commitment to combatting cyber threats and fostering innovation within the digital assets space.

Affected: U.S. Treasury Department, Tornado Cash, North Korea

Keypoints:

• Sanctions against Tornado Cash removed following a legal review and court ruling.
• Over 100 Ethereum wallet addresses will also be delisted from the Specially Designated Nationals (SDN) list.
• Tornado Cash previously used to launder more than .6 billion in virtual assets since 2019.
• The ruling determined that immutable smart contracts cannot be classified as “property” under IEEPA.
• Treasury remains dedicated to restricting North Korea’s funding for weapons programs while promoting financial innovation.