US authorities require license to retrieve funds from Tornado Cash

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US authorities require license to retrieve funds from Tornado Cash

Authorities say users will need a license to retrieve funds from a Sanctioned mixer.

U.S. residents with Cryptocurrency trapped on Tornado Cash can now apply for a license from the U.S. Treasury Department to retrieve their money.

On September 13th, U.S. authorities published guidance on its sanctions of the cryptocurrency mixing service, Tornado Cash. The National Assets Control Office in New York also said that U.S. persons with assets deposited in the protocol can request a specific license from the Office of Foreign Assets Control to withdraw their funds.

A license must provide detailed information regarding previous transactions involving Tornado Cash, including the wallet address, the date and time of the transaction, the sum of crypto assets sent to Tornado Cash, and previous transaction hashes.

Although transacting via Tornado Cash is banned by the sanctions, interacting with the protocols' underlying code is not.

The arrest of a Tornado Cash developer in the Netherlands suggested authorities were taking action against developers for working on the protocol's code.

Jake Chervinsky, head of the Blockchain Association in Washington, argued that the lack of U.S. involvement in the arrest suggested the incident was likely unrelated to Tornado Cash.

The Treasury Department's clarifications indicate that OFAC is not addressing open-source development, but rather is fighting the money laundering and money laundering activities from cybercrime.

The Treasury Department also said OFAC is aware of reports about unsolicited transactions sending large amounts of crypto assets to famous wallets of celebrities and other prominent figures via Tornado Cash.

On Friday, headline changed to reflect that crypto assets in Tornado are not frozen.