Why Cryptocurrency Users Oppose the Tornado Cash Sanctions – Screen Rant | Jewelry Dukan

Ever since the US Treasury placed the Tornado Cash With Crypto Mixer on the OFAC sanctions list, the cryptocurrency community was in turmoil. The sanctions have created an existential debate about open source code, free speech, citizens’ right to financial privacy, the government’s right to sanction an entire technology rather than just those who misuse it, and the potentially dangerous precedent of the Treasury triggered hiring for himself.


In August 2022, the US Treasury Department imposed sanctions on Tornado Cash and its users, sparking debate and outrage in the crypto community. The Ministry of Finance had already imposed sanctions on Blender, a centralized crypto mixing service. However, Tornado Cash is not owned and operated by a centralized entity like Blender and is an open-source Ethereum protocol governed by a Decentralized Autonomous Organization (“DAO”), a community of token holders who submit proposals can source code and vote on changes to the Tornado Cash log they maintain.

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As CryptoDaily discussed, many prominent figures in the crypto community believe that open source code is protected freedom of speech and that the government does not have the right to impose sanctions on an open source technology. Several Coinbase employees and customers have since lost access to their crypto in the wake of the tornado cash sanctions, prompting the company to lend its massive financial clout to the class action lawsuit filed against the Treasury Department in August. The privacy concerns surrounding Web3 and blockchain technology are the official reason crypto mixers exist in the first place, as there is currently no way to hide a user’s crypto holdings from other users and the discovery or leaking of one’s identity Crypto holders can put them or people associated with them at risk.

The sanctions also set a dangerous precedent

As reported by blocks, a contributor to the open-source code Tornado Cash, was arrested in Amsterdam shortly after the sanctions were announced, fueling the crypto community’s zeal in fighting the sanctions. They argue that if developers can be arrested and charged for contributing to open-source code that is later used by hackers, crypto scammers, and criminals, no one who contributes to open-source projects is in front of the downstream effects its use is safe from criminals. Most internet technologies in use today are open source and are widely used for criminal activities on the dark web, leading many developers who contributed to the open source technologies of the internet to now question their security and future.

Also troubling is the notion that sanctioning a collection of Ethereum smart contracts is tantamount to treating an entire technology as an individual, setting a dangerous precedent for all open-source technologies that are sometimes used for illegal activities, including the internet. There is historical precedent for the government trying to interfere with the development of the Internet, as evidenced by the “crypto wars” of the 1990s. The arguments then made against internet cryptography were the same as those used today against cryptocurrency mixers and “privacy coins”, citing their use in criminal activity. Today the Cryptography over the internet is vital to protecting its users, but privacy does not yet exist for public blockchains.

If open source projects can be sanctioned for their downstream criminal use, it is plausible that sanctions could be imposed on any open source technology used for criminal purposes, such as the entire Internet protocol or the source code of the World Wide Web . While sanctioning a tool commonly used for money laundering seemed like a step in the right direction, it ultimately caused immense outrage in the cryptocurrency community, for the same reasons the Crypto Wars of the 1990s sparked outrage at the early internet era. The cryptocurrency community believes that open source code is akin to free speech and developers should not be held accountable for how it is used by criminals and that privacy is necessary for personal security. Given the now Coinbase-funded class action lawsuit against the Treasury Department, it remains to be seen if that is the case Tornado Cash Sanctions remain in place.

Source: CryptoDaily, Blockworks

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