In a significant development for the crypto space, the U.S. Department of the Treasury has officially lifted the sanctions imposed on Tornado Cash, a decentralized crypto protocol known for enhancing privacy in blockchain transactions. The sanctions, originally applied in August 2022, were reversed following legal challenges that resulted in favorable rulings for Tornado Cash.
The Office of Foreign Assets Control (OFAC), which had placed Tornado Cash on its Specially Designated Nationals (SDN) list, sanctioned the platform after allegations that it facilitated North Korean hackers, specifically the Lazarus Group, in laundering stolen cryptocurrency. These funds were reportedly used to finance North Korea’s missile programs.
However, a U.S. appeals court ruled in November 2024 that the Treasury Department exceeded its authority by sanctioning Tornado Cash. This decision was followed by a Texas District Court’s order in January 2025 to reverse the sanctions. The Treasury Department’s latest move removes Tornado Cash and several associated wallet addresses from the OFAC SDN list.
Scott Bessent, Secretary of the Treasury, emphasized the importance of securing the digital asset industry from malicious actors while also enabling innovation and financial inclusion. Despite the lifting of sanctions, the Lazarus Group remains linked to various high-profile crypto heists, including the $1.4 billion Bybit hack.
This ruling marks a significant moment in the ongoing debate over privacy and regulation in the cryptocurrency space.
