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In a dramatic policy reversal that signals a potential sea change in the regulation of decentralized finance, the U.S. Department of the Treasury announced on March 21, 2025 that it has removed economic sanctions against Tornado Cash, the controversial cryptocurrency mixing service that has been under U.S. sanctions since August 2022.
The decision, reflected in the Treasury’s filing in Van Loon v. Department of the Treasury, marks a significant victory for privacy advocates and crypto developers who have long argued that code itself should not be the target of sanctions.
WASHINGTON, DC - MARCH 13: A seal on the exterior of the U.S. Department of Treasury building
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Sanctioning Tornado Cash
Tornado Cash is a virtual currency mixer operating on the Ethereum blockchain. It enables anonymous transactions by obscuring the origin, destination, and counterparties involved. By pooling and redistributing funds, Tornado Cash enhances privacy—but this feature has made it a very popular tool for laundering stolen assets, especially in high-profile cyber heists.
On August 8, 2022, the platform was sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) under Executive Order 13694 for providing financial, material or technological support for cyber-enabled activities originating outside the U.S. OFAC sanctioned Tornado Cash for “failing to impose effective controls” that prevented malicious actors from laundering funds through the crypto mixer. The activities connected with mixing and laundering the money were considered to pose a significant threat to U.S. national security, foreign policy, and economic stability—mainly when they involve the theft of funds, trade secrets, personal identifiers, or financial data for commercial gain or competitive advantage.
The OFAC designated Tornado Cash for its role in laundering over $455 million in cryptocurrency stolen by the Lazarus Group, a hacking organization linked to North Korea. Tornado Cash mixed over $7.6 billion worth of Ether since its launch in August 2019 up until 2022, according to Chainalysis. Almost 30% of the funds sent through it have been tied to illicit actors.
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