On Tuesday, one day after the U.S. Treasury sanctioned cryptocurrency mixer Tornado Cash for its alleged role in cryptocurrency money laundering operations, intervals of 0.1 Ether (ETH) transactions began materializing from the smart contract to prominent figures such as Coinbase CEO Brian Armstrong and American television host Jimmy Fallon. It is not possible to trace the source of the transactions per Tornado Cash design, and as a result, either one individual or multiple individuals or entities could be involved in the operation.
Notable individuals/companies who just received funds from a government-sanctioned entity:
- Jimmy Fallon
- Shaquille O'Neal
- PUMA
- Randi Zuckerberg
- Logan Paul
- Brian Armstrong
- Steve Aoki
- Ukraine Crypto Donation
- Dave Chappelle
- Beeple
Field day for investigators. https://t.co/9HDJmppzT2
— FatMan (@FatManTerra) August 9, 2022Due to sanctions, it is illegal for any U.S. persons and entities to interact with Tornado Cash’s smart contract addresses, blockchain or business-wise. Penalties for willful noncompliance can range from fines of $50,000 to $10,000,000 and 10 to 30 years imprisonment.
The consistency of the transactions indicate that the sender(s) may be starting a prank as to direct law enforcement attention to the recipient individuals. However, the Treasury sanctions require "willful" engagement with the blacklisted smart contract addresses as a precondition for possible criminal proceedings. Thus, it is unlikely that the receipt of tokens from Tornado Cash on a gratuitous basis, without any prior knowledge nor engagement, can constitute a violation of the sanctions.
The same day, Web3 development platforms Alchemy and Infura.io joined stablecoin issuer Circle and programming depository vault GitHub in blacklisting the sanctioned Tornado Cash addresses and barring access to its front-end application. Months prior, Tornado Cash attempted to address ongoing concerns that its platform was being used by malicious hackers to launder stolen crypto funds by disabling illicit wallets from accessing the application. However, its co-founder, Roman Semenov said at the time that the instrument only blocks access to the decentralized application, or DApp, interface and not the underlying smart contract.
Months prior, Tornado Cash attempted to address ongoing concerns that its platform was being used by malicious hackers to launder stolen crypto funds by disabling illicit wallets from accessing the application. However, its co-founder, Roman Semenov said at the time that the instrument only blocks access to the decentralized application, or DApp, interface and not the underlying smart contract.
