U.S. lawmakers are urging the Treasury Department to prioritize investigations into Tornado Cash, a decentralized crypto mixer linked to laundering billions in illicit funds.
Led by Rep. Sean Casten, a group of Democratic lawmakers highlighted the platform’s continued role in illegal activities despite being sanctioned in 2022 by the Office of Foreign Assets Control (OFAC).
Tornado Cash’s co-founder Roman Storm has come under scrutiny for allegedly using laundered funds to purchase luxury assets, including properties worth $3.1 million and a Tesla SUV.
Storm admitted to the platform’s lack of security measures, enabling users to bypass sanctions and Anti-Money Laundering (AML) safeguards. Despite efforts to block deposits from sanctioned addresses, Tornado Cash remains a tool for cybercriminals, raising concerns about its persistent misuse.
The platform has been implicated in several high-profile hacks, including the Ronin Network breach. In 2022, Dutch authorities sentenced Tornado Cash developer Alexi Pertsev to five years in prison for laundering $2.2 billion. Legal proceedings against Storm and other co-founders are ongoing, with both seeking crowdfunding to cover substantial legal costs.
Critics argue that sanctioning software like Tornado Cash sets a controversial precedent, as it targets decentralized technology rather than individuals. However, its role in laundering stolen funds, including $50 million from hacks in September 2024, has intensified calls for stricter regulation of crypto mixers.
As lawmakers push for stronger measures to curb the platform’s misuse, the debate over balancing privacy and regulation in decentralized systems continues. Tornado Cash’s future remains uncertain amid ongoing legal battles and heightened scrutiny.
