Crypto industry skeptical about Treasury concessions on Tornado Cash sanctions

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Cryptocurrency experts said that updated sanctions on a blockchain program used to anonymize payments pose a threat to digital currencies and individual liberties despite the Treasury's efforts to ease the rules to take account of the industry's complaints.

The Treasury Department's Office of Foreign Assets Control had updated its rules surrounding Tornado Cash, a protocol that allows users to submit cryptocurrency to an address and get it back via a secondary address for security purposes. While the protocol was regularly used for legal purposes, it was also a popular tool for criminals and hackers to launder their cryptocurrency.

Others said the guidelines implicate too many cryptocurrency users."Combating illicit finance is crucial, but precision matters," said Sheila Warren, the CEO of the Crypto Council for Innovation."Sanctions would best be applied to illicit actors' addresses, not on a blanket basis to smart contracts like TC that many others use for legitimate privacy reasons."

Holland noted that the guidelines do not offer any clarifications on how open-source projects such as Tornado Cash can avoid being sanctioned since the entity cannot control whether or not, for instance, North Korean hackers use it. It also lacks any information on whether these sanctions would apply in a situation where someone copied Tornado Cash's code and used it to make a similar cryptocurrency entity.

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Crypto industry skeptical about Treasury concessions on Tornado Cash sanctionsCryptocurrency experts said that updated sanctions on a blockchain program used to anonymize payments pose a threat to digital currencies and individual liberties despite the Treasury's efforts to ease the rules to take account of the industry's complaints.
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