US Lawmaker Asks Treasury to Explain ‘Unprecedented’ Tornado Cash Sanctions

Updated by Kyle Baird
In Brief
  • Congressman wants explanation from treasury over Tornado Cash sanctions.
  • Tornado Cash sanctions target software not individuals — a first for OFAC.
  • The letter also questions FinCEN influence.
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In a letter addressed to Treasury Secretary Janet Yellen, the Congressman for Minnesota’s Sixth District, Tom Emmer, wants an explanation regarding what he calls the unprecedented sanctioning of Tornado Cash.

On Aug. 8, the Treasury Department’s Office of Foreign Asset Control (OFAC) sanctioned the mixing service for allegedly sponsoring the laundering of $7 billion in illicit fund flows. The platform was also allegedly being used by the infamous North Korea hacking group Lazerus to launder stolen funds in the amount of $455 million.

US rep says Tornado Sanctions are unique

In the letter, Emmer says the sanctions are unique since they were levied against a piece of software instead of an individual, something that ignores previous precedents.

“OFAC’s sanctions on the virtual currency anonymizing software Tornado Cash in accordance with Executive Order 13694 are the first sanctions issued against something other than an individual or entity determined ‘to be responsible for or complicit in’ malicious cyber-enabled activities that pose a threat on the United States national security, foreign policy, economic health or financial stability,” he said in his letter to the treasury.

Congressman asks treasury to explain what is sanctionable technology

Congressman Emmer also tasked the treasury to explain what technology for blockchain developers is sanctionable and what financial law enforcement actions are going to be taken in the foreseeable future.

“It would be helpful for congress and blockchain developers to understand the factors considered in OFAC’s designation of technology to the SDN list” the letter read.

Tornado Cash developer extradited to the US

Since the sanctions were issued and investigations launched, Netherlands authorities arrested a 29-year-old man said to be the brain behind Tornado Cash development and extradited him to the United States. He faces allegations of sponsoring illicit financial flows, money laundering, and mixing cryptocurrencies through the decentralized mixing service.

Emmer also says the Under Secretary of the Treasury for Terrorism and Financial Intelligence has failed to justify that “Tornado Cash repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors” as alleged.


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