Democratic lawmakers in the United States are pressing Treasury officials to address the continued operation of Tornado Cash, a cryptocurrency mixing service that was sanctioned in the United States two years ago.
In a letter sent on November 14, members of the US House of Representatives requested details about the Treasury’s actions regarding Tornado Cash, noting that the service remains functional despite a 2022 sanction.
The lawmakers outlined the platform’s alleged involvement in aiding rogue states, terrorist organisations, and cybercriminals, raising concerns about the rise in mixer activity, describing it as a problem that “shows no signs of going away.”
The letter attributed Tornado Cash’s continued operation to its decentralised nature, contrasting it with centralised mixers like Blender and Sinbad, which shut down following sanctions.
Representatives also highlighted a sharp increase in activity in the platform despite the regulatory scrutiny, noting that Tornado Cash handled $1.8 billion in deposits during the first half of 2024—an uptick of 45% from the total recorded in 2023.
Further, the letter requested detailed estimates of illicit activities conducted through Tornado Cash since its sanctioning, demanding updates on enforcement actions taken against users and exchanges associated with the service.
Lawmakers also sought suspicious activity reports, transaction statistics, and clarification on whether secondary sanctions targeting non-US entities or exchanges were being considered.
Additionally, the lawmakers inquired about the status of a proposed rule from the Financial Crimes Enforcement Network that would require financial institutions to track and record transactions involving crypto mixers.
They further questioned whether the Treasury had sufficient enforcement tools to tackle the issue effectively and requested a response, along with a staff briefing, by December 2.
The Tornado Cash saga
Tornado Cash, founded in 2019 by Russian developers Roman Semenov, Alexey Pertsev, and Roman Storm, operates as a cryptocurrency mixer.
It uses cryptographic techniques to conceal the source of transactions by splitting deposits into numerous smaller ones, making the source of the transactions hard to trace.
Sanctioned in August 2022, Tornado Cash was accused of allowing over $7 billion in cryptocurrency to be laundered, which included funds stolen by North Korea-linked hacking groups like Lazarus, an entity the US government has said is linked to funding North Korea’s nuclear program.
In May 2024, Pertsev was sentenced to five years in prison for violating anti-money laundering laws due to transactions involving Tornado Cash.
Meanwhile, fellow co-founder Storm continues to face legal challenges, with his trial on money laundering and sanctions violations recently postponed to April 2025.
Prosecutors also recently amended an indictment seeking forfeiture of Storm’s assets, including a Tesla Model Y and two homes in Washington state valued at $3.1 million, which they claim were purchased with illicit funds generated via the crypto mixing service.
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