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  2. Tornado Cash Sanctioned. Did the Government Overstep Its Bounds? - Ep. 384

Tornado Cash Sanctioned. Did the Government Overstep Its Bounds? - Ep. 384

Aug 12, 2022

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

 

Thank you to our sponsors!

 

1inch: https://1inch.io/

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

 

Jerry

Twitter: https://twitter.com/jerrybrito

 

Tornado Cash

Tornado Cash Sanctioned: https://www.coindesk.com/policy/2022/08/08/crypto-mixing-service-tornado-cash-blacklisted-by-us-treasury/

Coin Center’s article authored by Jerry Brito and Peter Van Valkenburgh: https://www.coincenter.org/u-s-treasury-sanction-of-privacy-tools-places-sweeping-restrictions-on-all-americans/

Circle freezes USDC in sanctioned wallets: https://www.theblock.co/post/162172/circle-freezes-usdc-funds-in-tornado-cashs-us-treasury-sanctioned-wallets 

Crypto exchange dYdX blocked accounts that received funds from Tornado Cash: https://www.coindesk.com/business/2022/08/11/crypto-exchange-dydx-blocked-accounts-that-received-even-small-amounts-from-tornado-cash/

The possibility of forking Tornado Cash: https://www.coindesk.com/tech/2022/08/10/cloning-tornado-cash-would-be-easy-but-risky/

What the sanctions mean for privacy coins: https://www.coindesk.com/layer2/2022/08/09/what-the-tornado-cash-sanction-means-for-privacy-coins/

Tornado Cash laundered $1.5 billion, according to Elliptic: https://hub.elliptic.co/analysis/tornado-cash-mixer-sanctioned-after-laundering-over-1-5-billion/

Celebrities get Dusted: https://decrypt.co/es/107090/tornado-cash-dusts-public-wallets-jimmy-fallon-brian-armstrong-steve-aoki-logan-paul

 

Hacks linked to Tornado Cash

Ronin: https://www.cnbc.com/2022/04/15/ronin-hack-north-korea-linked-to-615-million-crypto-heist-us-says.html

Harmony: https://decrypt.co/104138/north-korean-attackers-behind-100m-harmony-hack-report

Crypto.com: https://www.wired.com/story/crypto-hack-nso-group-security-news/

Nomad: https://decrypt.co/106459/crypto-bridge-nomad-exploited-190m-frenzied-free-for-all

Previous Coverage of Unchained: Will the Nomad Mass Looting Change How Law Enforcement Treats DeFi Hacks?: https://unchainedpodcast.com/will-the-nomad-mass-looting-change-how-law-enforcement-treats-defi-hacks-ep-382/