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1076. What is prohibited as a result of OFAC’s designation of Tornado Cash?
On August 8, 2022, OFAC designated the entity Tornado Cash pursuant to Executive Order (E.O.) 13694, as amended, for facilitating the laundering of proceeds of cybercrimes, including those committed by the Lazarus Group, a North Korea state-sponsored hacking group that was sanctioned in 2019. On November 8, 2022, OFAC simultaneously designated Tornado Cash pursuant to E.O. 13722 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of the Government of North Korea and redesignated Tornado Cash pursuant to E.O. 13694, as amended, for facilitating the laundering of proceeds of cybercrimes, including those committed by the Lazarus Group, and as such the August 8, 2022 designation of Tornado Cash is no longer operative and is wholly replaced. As described in FAQs 561 and...
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[11-29-24 Update - see Joseph Van Loon et al v. Department of the Treasury et al. (2024, 5th Cir.), and comments thereto. This FAQ is likely to be removed or amended at some point in the future; the below has not yet been amended in light of the 5th Circuit opinion.]
1) BACKGROUND
For background on the initial designation and redesignation of Tornado Cash, refer to Consolidated Comment on the Designation and Redesignation of Tornado Cash; Ensuing Litigation (System Ed. Note).
When the initial 8-8-22 designation notice was issued, Tornado Cash was widely regarded as having been the first software protocol designated on the SDN list by OFAC, raising certain compliance issues of first impression as well as arguments concerning the scope of IEEPA...