

Tornado Cash Sanctioned. Did the Government Overstep Its Bounds? - Ep. 384
Aug 12, 2022
Jerry Brito, executive director of Coin Center, dives into the controversial sanctions against Tornado Cash. He discusses how the government's actions may have misclassified the decentralized service, impacting many legitimate users. Brito raises concerns about the constitutional validity of the sanctions and argues for clearer regulatory frameworks. He also explores the complexities of unfreezing assets affected by these sanctions, and the broader implications for financial privacy and the future of cryptocurrency regulation.
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Blender.io Sanction
- Blender.io, a centralized crypto mixer, was sanctioned with little protest from the crypto community.
- This is because Blender.io, unlike Tornado Cash, is a company that takes custody of user funds.
Decentralized Nature of Tornado Cash
- Tornado Cash, unlike Blender.io, is a decentralized application (dApp) consisting of immutable smart contracts.
- The Office of Foreign Assets Control (OFAC) mistakenly treated Tornado Cash like a centralized entity.
Tornado Cash Usage
- Roughly 30% of Tornado Cash funds are tied to illicit activities.
- The remaining 70% includes privacy-focused users, DeFi apps, and operational security practices.