Crypto: The American Justice Lifts The Sanctions Against Tornado Cash

For a time, Tornado Cash was the ugly duckling of the blockchain. Accused of obscuring the trail of several billion dollars in dubious funds, the famous crypto mixer found itself on the U.S. Treasury’s blacklist. But surprise on March 21: the guillotine fell… the other way around. The United States government has simply lifted the sanctions against this protocol. A twist of fate? Maybe. A sign of change? Definitely.

Tornado Cash released: is the tide turning for crypto mixers?

It’s not every day that an anonymization tool, deemed complicit with North Korean hackers (the infamous Lazarus Group, responsible for the Bybit hack), is cleared of all suspicion… or almost. The affair dates back to 2022 when Tornado Cash was accused of helping to make over 7 billion dollars disappear. Just that. Authorities hit hard, blocking access and freezing connections with U.S. players.

But here’s the thing: a tiny grain of sand came to jam the judicial machine. Last November, an appeals court ruled that Tornado Cash’s smart contracts were neither people nor properties. Translation: you cannot sanction code as if it were a legal entity. A real case study for lawyers and a relief for advocates of free code.

Decentralization vs regulation: does freedom have its limits?

So, what does this turnaround mean for the crypto world? First, it proves that decentralization seriously complicates the regulators’ task. It is impossible to muzzle open code like you would fine a Wall Street crook. Next, it raises a serious question: how far can we go to protect privacy without opening the door to abuses?

The Treasury, for its part, is not letting its guard down. It continues to monitor North Korean cybercriminals and reminds that vigilance is still necessary. The message is clear: “OK for anonymity, but not for impunity.”

As the SEC has just cleared up a legal gray area around PoW mining, it is now Tornado Cash’s turn to be freed. If the code is free, its uses are not always so. At a time when crypto regulation is still feeling its way, this case reminds us that innovation often moves faster than the law… and that the debate is just beginning.