Tornado Cash Used For Good Causes Too, Vitalik Buterin Asserts As Crypto Community Reacts to Ban

Updated by Kyle Baird
In Brief
  • Vitalik Buterin shared that he used Tornado Cash to donate to Ukraine.
  • Tornado Cash, an Ethereum-based mixing service, was banned by the US Treasury.
  • The ban raised questions about the proper regulation of decentralized protocols.
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Vitalik Buterin, a co-founder of the second leading cryptocurrency Ethereum, said he used the now sanctioned by the U.S. government mixing service Tornado Cash.

“I’ll out myself as someone who has used TC [Tornado Cash] to donate to [Ukraine],” Buterin wrote in a tweet earlier today, agreeing with another user who pointed out that services like Tornado Cash are often used for good causes like donating to help Ukraine.

“Wanting to donate to Ukraine is a great example of a valid need for financial privacy <…> On this note, curious if there are documented examples of TC having been used for this,” Jeff Coleman, co-founder of Counterfactual, shared on his Twitter.

Tornado Cash is a smart contract mixer built on Ethereum, which was banned by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) yesterday. 

According to the U.S. Treasury Department, Tornado Cash “has been used to launder more than $7 billion worth of virtual currency since its creation in 2019,” including the $455 million that was stolen by the Lazarus Group, a Democratic People’s Republic of Korea (DPRK) state-sponsored hacking group.

Tornado Cash’s co-founder Roman Semenov shared that his GitHub account was suspended, along with a number of other TC resources, including Tornado Cash GitHub organization, smart contract addresses linked to Tornado Cash on Circle, Infura’s RPC, and others.

The ban prompted a discussion around services like Tornado Cash being used for transactions in the crypto industry and their proper regulation.

Jerry Brito, an executive director of Coin Center, a non-profit working with the policy issues facing cryptocurrencies, pointed out that that ban appears to be the sanctioning of a tool that is neutral in character and that can be put to good or bad uses like any other technology,” instead of taking action against a single person or agency.

Jake Chervinsky, a crypto lawyer and head of policy at Blockchain Association, said that although the association supports the U.S. Treasury’s “mission to combat illicit activity in crypto,” they are at the same time concerned that the ban of the mixer “crosses a line that the US government has always respected [and] should continue to uphold as a matter of good policy,” adding that this decision “to sanction <> a decentralized protocol, threatens that smart [and] balanced approach to crypto,” the agency has upheld before.

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