The U.S. Treasury has lifted economic sanctions against Tornado Cash, a firm that facilitates anonymous cryptocurrency transactions. The Biden administration previously accused the company of laundering over $7 billion for North Korean and other cyber hackers.
In 2022, the Treasury Department's Office of Foreign Assets Control blacklisted Tornado Cash after determining its role in laundering proceeds from cybercrimes, including $455 million stolen by Lazarus, a North Korean government-backed hacking group.
Six Tornado Cash users, supported by the Coinbase crypto exchange, filed a lawsuit to contest the sanctions. In November, a U.S. appeals court issued a ruling, but the sanctions remained in effect.
After reviewing legal and policy concerns related to the sanctions in light of evolving technologies, the Treasury decided to repeal them. Despite this decision, the department expressed ongoing concerns about North Korea's state-sponsored hacking and money laundering efforts, which fund government activities.
Treasury Secretary Scott Bessent emphasized the importance of securing the digital asset industry from exploitation by North Korea and other illicit actors, stating that this is crucial for establishing U.S. leadership and ensuring benefits from financial innovation and inclusion.
President Donald Trump has sought to reform U.S. cryptocurrency policies and recently signed an executive order addressing cryptocurrencies. He also convened industry leaders at the White House.
Two co-founders of Tornado Cash are facing allegations of facilitating over $1 billion in money laundering for the Lazarus Group. One founder, Roman Storm, awaits trial and has denied any criminal involvement. Last May, Tornado Cash developer Alexey Pertsev received a five-year and four-month prison sentence in the Netherlands for money laundering.