US Secretary of State Anthony Blinken has issued a warning, stating that the government would keep “pursuing vigorously” cryptocurrency mixers who are thought to be involved in money laundering.
The US Treasury imposed sanctions against Tornado Cash as a result of claims that it had allowed the laundering of more than $7 billion since 2019. At the same time, the statements were made. According to a press statement, Tornado Cash repeatedly failed to put in place “effective safeguards” to prevent criminals from laundering money.
Cryptocurrency mixers do not conduct “Know Your Customer” (KYC) checks by definition. Roman Semenov, a co-founder of Tornado Cash, outlined how the system is decentralized and self-contained, meaning it runs independently of outside oversight. To that purpose, it lacks a headquarters and employees, and its user interface is based on a domain registered with the Ethereum Name Service.
However, according to the US Treasury, “crypto mixers that aid criminals pose a threat to the national security of the United States.” And that it would keep an eye on mixer activity in order to stifle unlawful financial risks.
“[The] Treasury will utilize its authority to combat the dangers of illicit funding in the ecosystem of virtual currencies” and it will continue to look into the usage of mixers for illegal activities.
Since the platform is an independent, impartial tool, the cryptocurrency community as a whole responded unfavorably to the punishments, with many voicing governmental interventionism.