Will the Tornado Cash sanctions have a chilling effect on the crypto industry? | Crypto

Will the Tornado Cash sanctions have a chilling effect on the crypto industry?

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– The U.S. Treasury Department recently sanctioned the cryptocurrency mixer Tornado Cash over allegations that it was being used to launder money.
– The department claims, among other allegations, that North Korean hackers used Tornado Cash to steal over $455 million.
– The sanction, and subsequent arrests of developers tied to Tornado Cash, will have a massive chilling effect on developers worldwide in the crypto and DeFi industry, said Steven Sidley, Professor at the University of Johannesburg and Head of the universitys Blockchain and CryptoVerse Research Group.
– Ran Neuner, Host of Crypto Banter and CEO of Onchain Capital, echoed concerns about the widespread ramifications of the U.S. governments move.
– A cryptocurrency mixer like Tornado Cash allows users to send crypto to others, without revealing individual wallet addresses.
– The U.S. Treasury Departments Office of Foreign Assets Control (OFAC) claimed that $7 billion was laundered through Tornado Cash.
– However, Chainalysis, which is a reputable company in the [crypto] world, did an analysis and found that only 10 percent of transactions in Tornado Cash were used for hacks and illicit activity.
– Sidley added that the sanctions on Tornado Cash were unprecedented, and likely not legal.
– Coin Center, a non-profit focused on crypto regulation, has sued the U.S. Treasury over the Tornado Cash sanction.
– Sidley believes the case will be successful, but that it will take months or years.

 

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