Popular cryptocurrency mixer will block transactions from US-sanctioned addresses

Tornado Cash is the most popular among so-called cryptocurrency mixers, programs that scramble transactions of this type. As a result, it becomes more difficult to verify the origin and destination of the funds transacted.

Due to this feature, mixers are increasingly sought after by hackers and criminals. At the same time, they became the target of investigation by several governments. However, Tornado Cash has just partnered with data company Chainalysis to block transactions.

According to a tweet disclosed by the mixer itself, this blocking will be carried out at addresses sanctioned by the United States government. In this regard, Tornado Cash used a sanctions list created by the US Office of Foreign Assets Control (OFAC).

List of sanctions

Along with the message, Tornado Cash released a list of sanctioned addresses that was created in the block explorer. etherscan. The same addresses present in the list will be blocked by the mixer team and will not be able to use its services.

That is, any transactions originating from OFAC sanctioned addresses will be prohibited from using the main mixer platform. Therefore, the action will make it difficult for criminals or sanctioned entities to hide their tracks or funds from thefts.

The keyword here is “make it harder” as Tornado Cash founder Roman Semenov stated that the new rule will only affect the front end. Smart contracts, in turn, cannot be sanctioned because of their decentralized and censorship-proof nature.

Semenov stressed that maintaining financial privacy is of the utmost importance. After all, Tornado Cash is also used honestly, especially by those who live in countries that prohibit cryptocurrencies. In this case, the use of the mixer serves for citizens to avoid being targeted by their governments.

However, Tornado Cash also recognized that it must adopt better compliance policies. Therefore, the partnership aims to improve the image of the service and contribute to the authorities.

Mixers under the scrutiny of authorities

As Cryptheory reported, mixers are in the crosshairs of several governments around the world. In the United Kingdom, there are already proposals aimed at regulating the use of these tools.

The protocol’s last negative association was with the attack that stole $625 million from Ronin from Axie Infinity. The hacker used Tornado Cash to launder some of the stolen funds and move them to other wallets.

Initially, OFAC’s proposal was to prevent Russian citizens from using cryptocurrencies to violate sanctions imposed by the US after the invasion of Ukraine. However, Jonathan Levin, founder of Chainalysis, said that the company has not found any substantial evidence of Russians using cryptocurrencies for these purposes.