Tornado Cash Token Rallies After US Treasury Ends Sanctions, But Retail Traders Stay Bearish
Synopsis
The cryptocurrency had been blacklisted by the Office of Foreign Assets Control (OFAC) in 2022, alleging that the privacy-focused platform facilitated money laundering tied to North Korea’s Lazarus Group.
Tornado Cash's (TORN) token surged more than 50% during U.S. market hours on Friday after the U.S. Treasury lifted economic sanctions on the cryptocurrency mixer following a legal review.
The decentralized protocol, which enhances privacy for Ethereum users by allowing them to mix assets before withdrawal, had been blacklisted by the Office of Foreign Assets Control (OFAC) in 2022.
The Treasury alleged that Tornado Cash facilitated more than $7 billion in money laundering, including transactions tied to North Korea’s Lazarus Group – the same hackers that were allegedly behind the recent $1.46 billion Bybit hack.
The sanctions effectively barred U.S. citizens and entities from interacting with the protocol, freezing its associated Ethereum addresses.
In January 2024, a U.S. Court of Appeals ruled that Tornado Cash’s smart contracts could not be classified as property owned by any foreign entity, challenging the legal basis of the OFAC sanctions.
The court stated that immutable smart contracts are not controlled or owned by any individual or organization.
Treasury Secretary Scott Bessent defended the agency’s vigilance despite the removal of sanctions. “Digital assets present enormous opportunities for innovation and value creation for the American people,” he said.
“Securing the digital asset industry from abuse by North Korea and other illicit actors is essential to establishing U.S. leadership and ensuring that the American people can benefit from financial innovation and inclusion,” he added, emphasizing continued concerns over North Korea’s use of digital assets for state-sponsored hacking and money laundering.
On Stocktwits, retail sentiment around the TORN token remained in the ‘extremely bearish’ zone amid tepid levels of chatter.
Friday’s rally brings TORN’s gains over the past month to nearly 50%, with more than 270% gains over the past 12 months.
However, Tornado Cash is still trading 96% below its all-time high of $436, seen in February 2021.
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