The issuer Circle of USDC released a statement to clarify its position after freezing all ETH addresses affected by the U.S. Treasury Department s sanctions against Tornado Cash.
Circle had to activate a blacklist function to freeze the blacklisted accounts in compliance with regulatory requirements. All USDC funds held in the wallets can't be transferred indefinitely.
Circle said that activating the blacklist function was against the ethos of an open internet. It stated that it had to make the move since complying with the existing law to stop money laundering is both a right and an obligation.
Circle considers the compromise as a price digital issuers have to pay to be compliant with existing laws in the US.
The stable coin issuer is looking to work with policymakers and key industry players to find a level of playground that abides by the existing laws without sacrificing individual privacy and freedom.
Financial privacy is important for many users of cryptocurrencies, and the US Treasury s ban on Tornado is a violation of their right.
Vitalik Buterin, a co-founder ofEthereumCo-founder, admitted in a tweet that he had used Tornado cash to protect the privacy of recipients of his donation to Ukraine's war efforts.
CommerceBlock's privacy pioneer CEO Nicholas Gregory said in a statement to CryptoSlate that the ban may do little in the fight against cybercrime.