Tornado Cash Removed from OFAC Sanctions List, TORN Token Surges

Highlights:

• OFAC has removed Tornado Cash from the sanctions list after an earlier court ruling late last year.
• Authorities believe that the platform was used to launder cash stolen from different sources.
• TORN has surged in price after inactivity, and the trading volume has increased after the announcement.

The US Treasury’s Office of Foreign Assets Control has officially taken Tornado Cash off its Specially Designated Nationals List. The US Court of Appeals for the Fifth Circuit issued a November 2024 ruling that established OFAC exceeded its authority with the sanction of Tornado Cash smart contracts. The court explained that the Ethereum-based tool’s smart contracts are self-executing codes and do not meet the definition of property under the International Emergency Economic Powers Act.

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JUST IN: 🇺🇸 Tornado Cash addresses removed from The Office of Foreign Assets Control (OFAC) sanctions list. pic.twitter.com/kUvRPqCrCc

— Whale Insider (@WhaleInsider) March 21, 2025

The Treasury Department listed Tornado Cash in August 2022. In particular, it claimed that the crypto mixing service was involved in laundering over $7 billion. They claim that the platform was used to launder funds stolen by the Lazarus Group, a hacking group from North Korea.

Tornado Cash was also allegedly used to launder funds from the $615 million Ronin Bridge hack. In addition, it was used to launder $96 million from the Harmony Bridge attack and $7.8 million from the Nomad heist.

Coinbase helped to fight against the Tornado Cash sanctions by supporting a lawsuit that argued that the restrictions were beyond reason. Brian Armstrong has stated that open-source code should not be sanctioned as privacy is an important feature for citizens. The Department of Justice secured court approval to extend the deadline by sixty days following the initial ruling. The extension gave OFAC until mid-March to act on the matter.

No one wants to see bad folks use crypto. But privacy is an important feature for many law abiding citizens, and you can’t sanction open source code (it’s a free speech issue). Glad to see this get fixed.

We look forward to working with Treasury to find ways to combat the ~0.1%… https://t.co/O6M8IXhdDL

— Brian Armstrong (@brian_armstrong) March 21, 2025

OFAC Maintains Sanctions on Tornado Cash Founders

While Tornado Cash itself is no longer sanctioned, OFAC has retained sanctions against one of its founders, Roman Semenov. Tornado Cash co-founders Roman Storm and Semenov are still facing ongoing court challenges. Authorities filed money laundering and sanctions violation charges against Semenov and Roman in 2023 for their actions with Tornado Cash.

A Dutch court found Alexey Pertsev guilty of laundering approximately $1.2 billion in cryptocurrency last year. In addition, Pertsev was sentenced to 64 months in prison. The delisting of the platform will impact the cases of its founders. The move to delist is a huge win for privacy tokens and the DeFi sector. A surge in new privacy tokens is expected as the case continues to give more clarity on their classification.

Treasury officials sanctioned the platform because they found that their mixing service enabled criminal activities. According to officials, Tornado Cash provided criminal groups an opportunity to hide the origin of stolen funds. The US Treasury agency plans to keep pursuing cybercriminal groups that they link to various individuals and organizational actors.

Treasury Cautions on Digital Asset Risks As TORN Surges

Department of Treasury Secretary Scott Bessent declared his intention to protect virtual assets from being exploited by criminal groups. The governance token of Tornado Cash, TORN, has reacted positively to the announcement. TORN is trading at $14.23, representing a 65.96% increase over the last 24 hours. Moreover, the coin jumped from a low of $7.3 hours ago after the announcement. The market cap stands at $74.85 million, and the trading volume has skyrocketed by 980.30% to $1.84 million.

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