On Friday, the U.S. Treasury made the decision to lift sanctions on crypto mixer Tornado Cash, a crypto firm that had been accused of aiding in the laundering of over $7 billion for cyber criminals, including North Korean hackers. The Treasury had previously blacklisted Tornado Cash in 2022 for its involvement in laundering $455 million stolen by the Lazarus hacking group.
However, this move has sparked significant criticism. In a recent post, Coinbase’s Chief Legal Officer, Paul Grewal, publicly condemned the U.S. Treasury for its handling of Tornado Cash’s delisting. Grewal argued that the Treasury was attempting to circumvent a final court decision, which he believed was unjust.
Grewal specifically pointed out that the Treasury was continuing legal actions against Tornado Cash even after removing it from the Specially Designated Nationals (SDN) list. The Treasury claimed that a final court decision was unnecessary, but Grewal insisted that this went against proper legal procedures.
He highlighted the importance of ensuring that Tornado Cash would not be relisted in the future, as past cases had shown that sanctions could be reimposed even after being lifted. Grewal’s criticism came amidst a lengthy legal battle where Tornado Cash users challenged the Treasury’s decision to add the mixer to the SDN list.
Support for Tornado Cash has come from groups such as Coinbase and the Ethereum Foundation, who have backed lead developer Alexey Pertsev’s defense. The ongoing debate over how crypto mixers should be regulated has been further fueled by the lifting of sanctions against Tornado Cash, with the Treasury expressing concerns about North Korea’s use of digital assets for illicit activities.