In a dramatic policy reversal, the U.S. Department of the Treasury has removed sanctions on Tornado Cash, a crypto mixing protocol that had previously been blacklisted due to its alleged role in laundering illicit funds, including money linked to North Korean cybercriminal groups.
The original sanctions, imposed in 2022, accused Tornado Cash of helping move over $7 billion in illegal transactions, making it one of the most controversial cases involving crypto privacy tools. However, after nearly three years of legal battles and lobbying from crypto advocacy groups, the U.S. Treasury has decided to lift the sanctions following a reassessment of their policy impact.
According to Treasury officials, the decision reflects a shift in how financial technologies are evaluated, particularly in the context of privacy, open-source software, and national security. Although Tornado Cash is no longer sanctioned, regulators reaffirmed their concerns about North Korea’s cyber activities and promised to continue monitoring blockchain transactions for signs of illegal activity.
