The US authorities consider services for mixing cryptocurrencies to be potential threats and continue to tightly control their activities. The Block writes about this concerning representatives of the bitcoin industry.
According to them, the sanctions imposed the day before against Tornado Cash prove the seriousness of OFAC’s intentions to combat illegal activities in the crypto market.
“The US will not tolerate excuses that mixers are neutral services. If such a service facilitates the activities of malicious actors, sanctions from the authorities cannot be avoided”
said David Carlyle, vice president of policy and regulatory affairs at Elliptic, an analytical company Elliptic.
He suggested that the situation with Tornado Cash will affect the activities of many exchanges – they will have to carry out thorough checks to avoid processing prohibited transactions.
The industry promotion and advocacy organization Coin Center expressed concern about the actions of OFAC.
“This is not about banning the use of the financial system by a single non-U.S. citizen, but about banning the ability of every American to use a specific open source software tool”
wrote Coin Center Executive Director Jerry Brito and Research Director Peter Van Valkenburgh.
According to them, any American can potentially receive money associated with Tornado Cash.
“Without being able to reject a transaction due to the nature of the blockchain, it is possible to commit a violation without any malicious intent”
they noted, adding that in such a case, the mechanism for applying sanctions should be explained in detail.
Experts at the Nansen analytical company fear large-scale consequences for the cryptocurrency industry against the backdrop of the potential for the authorities to “sanction part of the code.” The situation is exacerbated by the already habitual lag of government and regulators behind technological innovations.
“Privacy is important so that you don’t get metadata traced or unfairly identified as a North Korean-related activity just because the government can’t determine the Tornado Cash code”
said former Ethereum Foundation employee Hudson Jameson.
Other members of the crypto community, on the contrary, believe that the active opposition of the authorities confirms the correct vector for the development of the market.
“Governments will always resist human rights to financial freedom and privacy. The reality is that they may sanction Tornado Cash, but the smart contract will live on”
wrote Into the Ether podcast host Eric Konner.
Recall that on the eve of OFAC, Tornado Cash was placed on the sanctions list due to suspicions of laundering cryptocurrencies worth over $7 billion.
Circle froze 75,000 USDC in Mixer’s sub-sanctioned wallets, and the service team’s GitHub accounts were suspended.