On August 8, 2022, the U.S. Department of the Treasury, through the Office of Foreign Assets Control (OFAC), imposed sanctions on Tornado Cash, a cryptocurrency mixing protocol on the Ethereum platform, alleging that the platform facilitated money laundering activities linked to criminal organizations and sanctioned nations.

However, on March 21, 2025, the U.S. Department of the Treasury decided to lift the sanctions on Tornado Cash after the Western District of Texas Court ruled that imposing sanctions on open-source code exceeded OFAC’s authority. (Binance)

This decision led to a significant surge in the price of the TORN token, doubling within hours of the announcement.

Reacting to this event, Brian Armstrong, CEO of Coinbase, shared on social media:

“Nobody wants bad actors to use crypto, but privacy is an important feature for many law-abiding citizens, and open-source code cannot be sanctioned (this is a free speech issue) – glad to see this being rectified.”

The removal of sanctions on Tornado Cash not only impacts the platform but also reflects a shift in the U.S. government’s approach toward blockchain technology and decentralized finance (DeFi).

In an official statement, the U.S. Department of the Treasury stated:

“After reviewing the legal and policy issues related to applying sanctions to emerging financial and commercial technologies, we have decided to lift the sanctions on Tornado Cash.”

This move is expected to boost the growth of DeFi projects and restore community confidence in the future of decentralized finance.

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