In a recent development, the US Treasury’s Office of Foreign Assets Control (OFAC) has made a notable adjustment to its sanctions list. Tornado Cash, the well-known crypto mixing service, is now off the Specially Designated Nationals (SDN) List. However, it’s not all clear sailing—sanctions remain in place for one of its founders, Roman Semenov. The Department of Treasury officially announced this update in a press release on Friday.

Digging into the details, OFAC’s latest update reveals the removal of several Ethereum (ETH) addresses associated with Tornado Cash from the SDN List. Essentially, this action lifts US sanctions from these specific addresses.

Let’s rewind a bit. Tornado Cash’s website and its core smart contracts were initially blacklisted by the Treasury Department back in August 2022. The reason? Authorities pointed to the platform’s alleged role in facilitating large-scale money laundering by criminals.

According to officials, nefarious groups, including the infamous Lazarus Group, reportedly leveraged this Ethereum-based mixer to clean up over $7 billion in crypto assets by August 2022.

Following the 2022 sanctions, a group of Tornado Cash users, claiming legitimate reasons for using the platform and facing frozen funds, decided to take legal action. They sued Treasury Secretary Janet Yellen, OFAC, and Director Andrea Gacki, with Coinbase stepping up to support the lawsuit.

Then, on November 26, 2024, a significant turn of events occurred. The Fifth Circuit Court of Appeals sided with the plaintiffs. Their ruling stated that OFAC had overreached its authority because Tornado Cash’s smart contracts – being immutable – couldn’t be classified as ‘property’ under the International Emergency Economic Powers Act.

In their own words, the court clarified, “We hold that Tornado Cash’s immutable smart contracts (those lines of code enabling privacy) aren’t considered “property” belonging to a foreign national or entity. This means they fall outside the scope of what can be blocked under IEEPA. Therefore, OFAC acted beyond the authority granted by Congress.”

Fast forward to March 18, 2025, when the Treasury Department signaled its intention to remove Tornado Cash from the SDN List. And sure enough, by March 21, 2025, the delisting was officially completed.

Interestingly, OFAC also tweaked the designation for Semenov, who, despite the platform’s reprieve, remains under sanctions. The ‘cyber-enabled activities’ tag has been removed from his listing, but the ‘North Korea-related’ designation is still in place.

Even with Tornado Cash off the blacklist, founders Roman Storm and Roman Semenov aren’t out of the woods. They continue to face legal battles after being charged in August 2023 with money laundering and sanctions violations linked to the platform’s operations.

Keep in mind, this is a developing story. We’ll bring you updates as more information comes to light.

Share this article