One day after the US Treasury sanctioned cryptocurrency mixer Tornado Cash for its alleged role in cryptocurrency money laundering operations, 0.1 Ether (ETH) transactions to prominent figures such as Coinbase CEO Brian Armstrong and American television host Jimmy Fallon began materializing from the smart contract. According to Tornado Cash’s design, it is impossible to trace the source of the transactions, so either one individual or multiple individuals or entities could be involved in the operation.
The anonymous prank can cost up to $10 million and imprisonment!
Because of sanctions, it is illegal for US persons or entities to interact with Tornado Cash’s smart contract addresses, whether on the blockchain or in business. Penalties for willful noncompliance can range from $50,000 to $10,000,000 in fines and 10 to 30 years in prison.
The consistency of the transactions suggests that the sender(s) may be launching a prank to draw law enforcement attention to the recipients. However, as a precondition for possible criminal proceedings, the Treasury sanctions require “willful” engagement with the blacklisted smart contract addresses. As a result, it is unlikely that receiving tokens from Tornado Cash on an unrestricted basis would violate the sanctions without prior knowledge or engagement.
Alchemy and Infura joins Circle’s decision on blacklisting Tornado Cash addresses
On the same day, Web3 development platforms Alchemy and Infura.io joined stablecoin issuer Circle and programming depository vault GitHub in blacklisting sanctioned Tornado Cash addresses and restricting access to its front-end application. Tornado Cash had attempted to address ongoing concerns that malicious hackers were using its platform to launder stolen cryptocurrency funds by blocking illicit wallets from accessing the application months before. However, the instrument’s co-founder, Roman Semenov, stated at the time that it only blocks access to the decentralized application, or DApp, interface and not the underlying smart contract.
By blocking unauthorized wallets from using the application, Tornado Cash made an effort to allay long-standing worries that malicious hackers were using its platform to launder stolen cryptocurrency funds. Roman Semenov, a co-founder of the project, claimed at the time that the instrument only restricts access to the DApp interface and not the underlying smart contract.