U.S. lawmakers are demanding details from the Treasury on how it is addressing the matter of Tornado Cash.
Democratic members of Congress have prompted the Treasury to respond due to Tornado Cash’s continued operation despite sanctions.
Several Democratic House members are pressuring Treasury officials to explain their response to Tornado Cash, the crypto-mixing platform that received sanctions in 2022 yet remains functional.
“We write to request additional information about the ongoing use of the cryptocurrency mixing service Tornado Cash after sanctions were imposed,” said the lawmakers, which included crypto critic Brad Sherman of California, in a letter on Nov. 14.
“Despite sanctions, Tornado Cash has remained online and continues to function as decentralized smart contracts,” they added.
Lawmakers have highlighted renewed interest in mixers, noting that Tornado Cash processed $1.8 billion in deposits during the first six months of 2024, marking a 45% increase from its total deposits last year, adding:
“This problem shows zero signs of going away anytime soon.”
Lawmakers have detailed Tornado Cash’s service to rogue states, terrorist networks, and cyber criminals before pressing the Treasury for a comprehensive update on its actions.
In August 2022, sanctions targeted Tornado Cash for laundering over $7 billion in crypto, including assets stolen by hacking groups linked to North Korea.
The letter emphasized that, due to its decentralized structure, Tornado Cash continues to operate, unlike centralized mixers such as Blender and Sinbad, which have been sanctioned.
Lawmakers have requested estimates of Tornado Cash’s illicit usage since the sanctions and specifics on enforcement actions against users and exchanges connected to the service.
They have demanded suspicious activity reports and data and inquired whether the Treasury is considering secondary sanctions against non-U.S. individuals or exchanges dealing with mixed funds.
They have asked for information on the timeline for new regulatory measures, including FinCEN’s finalization of a proposed rule that requires financial institutions to record transactions linked to crypto mixers.
The lawmakers are seeking clarification on the Treasury’s enforcement capabilities and have called for a staff briefing and response by December 2.
In a pending lawsuit, crypto privacy advocates are challenging the Treasury’s sanctions, arguing that the Treasury unlawfully designated a decentralized service as an “entity” for sanctions.
A district judge postponed Roman Storm’s trial for money laundering and sanctions violations to April 2025. Storm, the co-founder of Tornado Cash, was arrested and charged in 2023.
