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 need a license to retrieve funds from Sanctioned mixers.

U.S. residents who have cryptocurrency trapped on Tornado Cash may now apply for a license from the U.S. Treasury Department to retrieve their funds.

On Sept. 13 US authorities published guidance about its sanctions on Tornado Cash, a crypto mixing service. The U.S. person with assets deposited in the protocol can request a specific license from the Office of Foreign Assets Control to withdraw their funds.

In order to obtain a license, individuals requiring a license must provide detailed information about the 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 prohibited by the sanctions, interacting with the protocol's 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, the head of policy at the Blockchain Association in Washington, said that the absence of US involvement in the arrest suggested that the incident was likely unrelated to Tornado Cash.

The Department of Education's clarifications indicate that OFAC is not combating open-source development, but instead is fighting money laundering, the money laundering from cybercrime.

The Treasury Department said OFAC is aware of reports about transactions sending small amounts of crypto assets to well-known wallets of celebrities and other prominent figures via Tornado Cash.

The headline has been changed to reflect that Crypto assets in Tornado are not frozen.