Tornado Cash, the world’s most popular and widely used stablecoin, has resisted a recent US Treasury punishment imposed on Tornado Cash, a cryptocurrency mixer that conceals transactions between wallets.
Tether Is Ignoring Treasury Sanctions
Tornado Cash was sanctioned earlier this month by the United States Treasury Department’s Office of Foreign Assets Control (OFAC) for facilitating the laundering of $7 billion in cryptocurrency since its inception in 2019.
Tether said on Wednesday, August 24, that it will not freeze the smart contract addresses associated with the newly sanctioned Tornado Cash.
Freezing Tornado Cash Addresses Could Be Dangerous
Tether stated that freezing the addresses might be “extremely disruptive” and “reckless.” The stablecoin issuer believes that the measure will alert suspects to the fact that a law enforcement investigation is underway.
Tether has refrained from suspending smart contract addresses associated with the sanctioned crypto mixer in order to minimize money desertion and jeopardize future evidence collection.
Tether warns that freezing assets (as Circle did) without orders from US authorities risks jeopardizing the operations of other regulators and law enforcement agencies throughout the world.
On the other hand,
Circle, the creator of the stablecoin USD Coin (USDC), has blacklisted smart contract addresses associated with the sanctioned Tornado Cash.
Why Should You Be Concerned?
Tether, based in Hong Kong, does not do business in the United States, yet it does voluntarily obey some U.S. rules as part of compliance.
The following are the entire terms of the sanction:
The US Treasury Department has blacklisted Tornado Cash Crypto Mixer.
Some investors believe the suspension is permanent. Read:
Kevin O’Leary believes that the Tornado Cash Sanction is a fair price to pay for institutional adoption.