Despite US Sanctions, Tether Continues to Support Tornado Cash: Report

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Despite US Sanctions, Tether Continues to Support Tornado Cash: Report

The world’s largest stablecoin issuer, Attachedmay not comply with US Treasury Department sanctions against crypto transaction privacy mixer Tornado Cash, according to a report released today by the Washington Post.

The post cites data analysis from crypto intelligence firm Dune Analytics to state that Hong Kong-based Tether has not blacklisted any accounts associated with Tornado Cash.

Tether’s chief technology officer, Paolo Ardoino, told the publication that Tether has yet to be approached by US officials or law enforcement with a request to freeze transactions with Tornado Cash.

He added that Tether “normally complies with requests from U.S. authorities” and views U.S. Treasury Department sanctions “as part of its world-class compliance program.”

Decrypt has contacted Tether to ask if it is applying any sanctions against Tornado Cash, but has yet to receive a response.

Tornado Cash harvests the whirlwind

Earlier this month, the US Treasury Department announcement sanctions against Tornado Cash, saying it took the action because criminals used the privacy mixer “to launder more than $7 billion value of virtual currency since its inception in 2019.”

While $7 billion is roughly the total amount of funds that passed through the privacy tool, according to blockchain data from Elliptic, barely $1.5 billion was obtained illegally.

Many in the United States and beyond have opposed the sanctions. Digital rights activist group the Electronic Frontier Foundation (EFF) said it was “deeply concerned“, while the non-profit crypto policy Coin Center said it was”explore a legal challenge.”

Jesse Powell, CEO of crypto exchange Kraken, last week joined the chorus of voices calling for sanctions “unconstitutional.”

Dutch repression

Five days after the United States announced sanctions against Tornado Cash, the Netherlands Tax Information and Investigation Service (FIOD) announced that it had stopped an “alleged” developer of Tornado Cash. Crypto Fans and Privacy Advocates decried the arrest like a declaration of war on coders.

Although this decision may appear to be linked to US sanctions, the FIOD pointed out that it was working under the direction of the Dutch prosecutor’s office, but did not coordinate with the US government and did not make the arrest due to the mixer being blacklisted by the Treasury.

The non-profit DeFi Education Fund contacted FIOD with questions about the arrest. The enforcement agency declined to verify whether the accused is 29-year-old Alexey Pertsev, but said the coding “can be punishable“if a developer writes code “for the sole purpose of committing criminal acts”.

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