The US Treasury’s Office of Foreign Assets Control (OFAC) has removed Tornado Cash, a well-known crypto mixing service, from its Specially Designated Nationals (SDN) List. However, one of its founders, Roman Semenov, remains under sanctions. This announcement was made in a press release on Friday.
Tornado Cash had been blacklisted since August 2022. The Treasury Department accused it of helping criminals launder stolen assets. Authorities claimed that groups like the Lazarus Group used Tornado Cash to launder over $7 billion in cryptocurrency.
After the sanctions were imposed, some users who believed they used Tornado Cash legitimately had their funds frozen. They filed a lawsuit against Treasury Secretary Janet Yellen, OFAC, and Director Andrea Gacki, with support from Coinbase.
On November 26, 2024, the Fifth Circuit Court of Appeals ruled in favor of the plaintiffs. The court decided that OFAC had overstepped its authority. It stated that Tornado Cash’s smart contracts, which are unchangeable lines of code, do not count as ‘property’ under the International Emergency Economic Powers Act (IEEPA). Therefore, they cannot be blocked by OFAC.
Following this ruling, the Treasury Department announced plans to remove Tornado Cash from the SDN List on March 18, 2025. The delisting was finalized by March 21, 2025.
While Tornado Cash is no longer on the sanctions list, Semenov still faces legal issues. His designation was modified, but he remains sanctioned, now only related to North Korea.
