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U.S. Government Removes Tornado Cash Sanctions
Tornado Cash was sanctioned multiple times over allegations of helping Lazarus Group launder funds.
By Nikhilesh De
Updated Mar 21, 2025, 7:34 p.m. Published Mar 21, 2025, 2:53 p.m.
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What to know:
- The U.S. Treasury Department's sanctions watchdog has removed Tornado Cash, a crypto mixing tool, from its global blacklist, overturning previous sanctions due to a federal appeals court ruling.
- Over 100 Ethereum (ETH) addresses are also being removed from the Specially Designated Nationals list, which the Treasury uses for maintaining its blacklist.
- Despite the removal of Tornado Cash from the sanctions list, Roman Storm, one of its co-founders, still faces a criminal trial this July over his alleged role in developing the smart contracts and protocols.
The U.S. Treasury Department's sanctions watchdog removed Tornado Cash from its global blacklist Friday.
The crypto mixing tool has been accused of helping North Korea's Lazarus Group launder stolen funds from its various hacks and thefts, and the U.S. Treasury Department's Office of Foreign Asset Control sanctioned it — meaning no U.S. person or anyone doing business with the U.S. could engage with it financially — multiple times. However, a federal appeals court ruled last November that OFAC couldn't sanction Tornado Cash's smart contracts because they weren't the "property" of any foreign national.
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"We remain deeply concerned about the significant state-sponsored hacking and money laundering campaign aimed at stealing, acquiring, and deploying digital assets for the Democratic People’s Republic of Korea (DPRK) and the Kim regime," a press release from the U.S. Treasury Department said.
Another release from OFAC lists over 100 Ethereum addresses that are being removed from the Specially Designated Nationals list, which is the record Treasury uses for maintaining its blacklist.
Roman Storm, one of the co-founders of Tornado Cash, faces a criminal trial this July over his alleged role developing the smart contracts and protocols. Another developer was charged but has not yet been arrested. After the Fifth Circuit's November ruling, Storm's lawyers filed a motion requesting the court reconsider its earlier decision to deny the dismissal of charges against him. That motion was smacked down in February, with Judge Katherine Polk Failla of the Southern District of New York (SDNY) arguing that, whether or not Tornado Cash itself was subject to sanctions "does not affect the sanctions Defendant allegedly conspired to violate (those on the Lazarus Group)."
Storm's lawyer, Brian Klein of Waymaker LLP, told CoinDesk that he was "very pleased" to see the sanctions against Tornado Cash removed.
"Now the SDNY prosecutors should similarly reconsider their unfortunate decision to charge our client, and dismiss their case against him," Klein added.
In a statement, Treasury Secretary Scott Bessent said the U.S. needs to "secure the digital asset industry from abuse by North Korea and other illicit actors."
In a Monday court filing, referenced by the Treasury in Friday's statement, the Treasury Department suggested it might not go so far as to remove the sanctions entirely.
"Vacating the designation of Tornado Cash in its entirety could have significantly 'disruptive consequences' for national security and law enforcement," the filing said.
The TORN token jumped 40% in the minutes after Treasury's statement.
Stephen Alpher and Cheyenne Ligon contributed reporting.
UPDATE (March 21, 2025, 15:05 UTC): Adds additional detail.
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