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On August 8, the ethereum mixing service Tornado Cash and all cryptographic addresses associated with the platform were officially banned by the Office of Foreign Assets Control (OFAC) of the US Treasury Department The ban followed the ban. Following the ban, Github, an internet hosting service for software and open source code development, erased some of Tornado Cash’s commits and suspended some of the project’s contributors.
Tornado Cash’s Github contributors were suspended from Github and the blacklisted ERC20 was left to liquidity providers
Tornado Cash has become a hot topic in the cryptocurrency world as the U.S. government decided Monday to ban the privacy-enhancing ethereum mixing service. OFAC, the U.S. Treasury Department’s watchdog agency, did not disclose exactly why Tornado Cash was sanctioned, but it is suspected that a North Korean hacking syndicate known as the Lazarus Group is to blame.
MyGitHub account has been suspended🤷
Is it now illegal to write open source code?
– Roman Semenov 🌪️ 🇺 (@semenov_roman_) . August 8, 2022
Lazarus Group associates allegedly mixed funds using Tornado Cash On April 15, 2022, Tornado Cash’s official Twitter account was updated with OFAC Specially Designated Nationals And Blocked Persons list (SDN), explaining that they had blocked a flagged Ethereum address listed on the list.” Tornado Cash is using [a] Chainalysis oracle contract to block OFAC sanctioned addresses from accessing the dapp,” the project’s social media account said at the time. The project’s social media accounts stated at the time. Tornado Cash’s Twitter account added:
Maintaining financial privacy is essential to protecting our freedom. But it should not come at the cost of noncompliance.
It is now being reported in detail that developers who contributed to the TornadoCache codebase on Github have been suspended and several commits removed. Tornado Cache founderRoman SemenovRoman Semenovexplained that his Github account has been suspended.” My Github account has just been suspended. Is it now illegal to write open source code?” Semenov asked. According to a Twitter user named “Bowtiediguana”, all OFAC addresses associated with Tornado Cash hold approximately; $437 million in stablecoins like USDC and USDTalong with stable coins like USDT, ETH and WBTC as well.
Circle has frozen 75,000 USDC belonging to unsuspecting Tornado users and 149 USDC donated to the project. pic.twitter.com/GBS41FtZvB
– banteg (@bantg) . 8/8/2022
After the OFAC ban, Circle blacklisted all USD coins (USDC) associated with the Tornado Cash platform. Bowtiediguana expects WBTC custodians Tether and Bitgo to do the same, as these ERC20 tokens can be frozen at the smart contract level. The defi educator also expects ERC20 custodians like Bitgo to “stop the redemption of tainted WBTC and make those tokens worthless. “Bowtiediguana added
liquidity providers will likely end up as bagholders of blocked WBTC (and stablecoin) assets if they do not *immediately* withdraw liquidity from the DEX.
Ethereum proponents say the OFAC ban was “the opening shot in Big Brother’s attack on crypto”
Meanwhile, after the ban, so many members of the crypto community debated the U.S. government’s actions.” Tornado Cache is ‘illegal,’ so surely the bad guys will stop using it,” Shapeshift founder Erik Voorhees writes.” Just as they will not use illegal weapons, smuggle illegal drugs, or launder money illegally by any means. Only law-abiding Americans will be hurt by this,” Voorhees added. Ethereum supporter Ryan Adams called the ban an attack on crypto.
The outlawing of Tornado Cash and the freezing of$USDC infuriated me.
At this point it is a war between the state and our economic freedom. I believe this is just the beginning.
We must fight for our freedom
“Today, the US sanctioned an Ethereum related to privacy service called Tornado cash address was sanctioned; Circle immediately froze the USDC of those accounts; GitHub suspended contributors to Tornado; and the US is now using the Tornado cash service as a way to protect the privacy of its users. If you were waiting for the opening shot of Big Brother’s attack on crypto, this was it,” Adams said. Crypto supporters discussed other ideas likedecentralizing Githubin a censorship-resistant way, and otherstalkedabout creating “new instances of Tornado contracts.”
Image credits: Shutterstock, Pixabay, Wiki Commons
