The U.S. Department of the Treasury is no longer sanctioning Tornado Cash. That's good because financial privacy is important. Tech that introduces onchain privacy is vital. Having the US government comply with an unequivocal judicial decision stating that immutable smart contracts cannot be sanctioned - also undeniably good. Hacking and money laundering, particularly by hostile nation state actors, remain a risk to users and protocols and a threat to crypto generally - both because it discourages users and builders from using the chain and because it encourages very heavy handed regulation like applying the Bank Secrecy Act to P2P software and its developers. Consensys is already working with US policymakers to choose solutions that respect financial freedom and privacy while also making meaningful progress against illicit finance.
I hope we can find a path for regulators to collaborate with developers to build compliant privacy preserving solutions.
This is really good news. And I agree that software companies should not be sactioned just because creating software that enables privacy. However, I would not recommend the final clients of my CASP clients to use it. All red flags will be alerted from an AML perspective...
While I am a huge supporter of privacy tech, I am not so sure about this privacy tech and these wanna be Caesars. "Oh oops we lost some of our reserve"... {sips cocktail on beach} "Oh oops, it seems to have been lost through Tornado Cash and we simply have no idea where it went". Solutions such as Panther Protocol have designed systems where privacy is default with the ability to view under extreme conditions. Sadly, it seems to me that's what is required given the "current management".
Tech, Payments, Crypto & Financial Services Counsel | Board Director | Driving Innovation in Stablecoins, AI, Privacy, Crypto, FoodTech | Fractional Counsel Service
1wThis is definitely a milestone moment—not just for Tornado Cash, but for how we interpret the boundaries of code, speech, and regulation. The ruling brings much-needed clarity: immutable smart contracts aren’t entities you can sanction. That’s a powerful precedent. But it doesn’t magically solve the tension between financial privacy and illicit finance. As someone working closely with crypto projects on the legal front, I think the next phase is all about nuance. Blanket enforcement won’t work, but neither will ignoring real risks. The challenge (and opportunity) is finding compliance frameworks that preserve innovation and privacy—without opening the floodgates to abuse. Glad to see Consensys leaning into that middle path. We need more of that energy in this space