The US Treasury Department has said that residents and citizens of the US can apply for a license to recover any funds they have that are locked up in the now-banned Ethereum coin-mingling tool Tornado Cash. The Treasury Department’s move to ban Tornado Cash in August sent the crypto community into a frenzy about privacy and government oversight, leaving many wondering whether their day-to-day crypto activities could lead to criminal charges. The Treasury’s Office of Foreign Assets Control (OFAC) also addressed other important questions about the implications of its sanctions on Tornado Cash.
The New guidance Provides a way for users to legally withdraw their money from the Private Transaction application by applying OFAC License – Authorization from OFAC to engage in transactions that would otherwise be prohibited.
At the time of publication, TornadoCash’s smart contracts currently have about $173 million (roughly Rs. 1,400 crore) remaining. According to DefiLlamasome of these funds may belong to users who are concerned about the legal ramifications of withdrawing them.
Three plaintiffs with funds in Tornado Cash filed a lawsuit against the Treasury Department last week, arguing that the sanctions froze their legally appropriated assets — a case that could be affected now, because there is a way to withdraw the funds.
After the initial approval announcement, anonymous users protested by ‘dusting’ or sending small amounts of ETH through Tornado Cash to various crypto wallets, including high-profile celebrities. OFAC’s rules will apply to these transactions, but OFAC will not give “enforcement priority” related to the matter, the guidance said.
The Tornado Cash website went offline after the approval, but the Tornado Cash app can still be accessed through other means. US citizens and residents are prohibited from engaging in any transactions with Tornado Cash.
