Sanctioning Tornado Cash: Implications and Controversies

This chapter examines the recent sanctions on Tornado Cash, exploring government miscommunication and questioning the rationale behind the sanctions. It also highlights the balance between illicit and legitimate activity in financial privacy, emphasizing the impact on American users and the need for clearer regulatory frameworks.

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Jerry Brito, executive director of Coin Center, talks about Tornado Cash, why it was sanctioned, and what this means for privacy in crypto.

Show highlights:

what Blender.io is and how it relates to Tornado Cash
how hackers have used Tornado Cash to launder money
whether the Office of Foreign Assets Control made a mistake, according to Jerry
how Americans were affected by the sanctions
why Jerry believes OFAC should have done an analysis to estimate how many people would be impacted by its decision
whether the sanctions should have been aimed at North Koren wallets and not the protocol
whether the sanctions are unconstitutional and whether Coin Center will litigate this
how Jerry believes Circle freezing USDC complicated everything
what the famous people who received 0.1 ETH from random accounts via Tornado Cash should do
what would happen if someone forked the Tornado Cash code and deployed a copycat smart contract to a new address
whether the sanctions signal the beginning of a privacy war on crypto
how regulators are applying the same traditional rules with crypto as they use with centralized entities