OFAC Answers Questions on Tornado Cash Sanctions, Uncertainty Remains

The Tornado Cash situation is a shrouded riddle. Why did OFAC license the software, and why did the Dutch authorities arrest one developer? Those are not the questions we answer today. OFAC updated Tornado Cash Frequently Asked Questions– Related Matters. The answers focus on the details of the sanctions rather than the big issues.

But we take them. They’re funny and bright, like the whole Tornado Cash situation.

OFAC Clarifies Tornado Cash Sanctions

Tornado Cash was the topic of choice in yesterday’s update of OFAC’s FAQ.made possible by the U.S. government Form for submitting a license request Announced that users can withdraw funds :

“For any transaction related to Tornado Cash that commenced prior to the August 8, 2022 designation but has not been completed by the designated date, any U.S. person or person conducting a transaction within the jurisdiction of the United States shall be subject to OFAC. Subjects may request specific licenses to engage in transactions involving virtual currency.U.S. Persons must provide the wallet addresses of the sender and recipient, the transaction hash, the date and time of the transaction, and the amount of virtual currency. “

So there is hope that if users are willing to go through a few hops and KYC-like procedures, their funds will be frozen. Another thing that seems like good news is that OFAC doesn’t prioritize dust.

“OFAC is aware of reports that, following Tornado Cash’s designation, certain U.S. Persons may have received unsolicited, notional amounts of virtual currency or other virtual assets from Tornado Cash. This is a practice commonly referred to as “dusting”. Technically, OFAC regulations apply to these transactions. ”

It’s all fine and dandy, but the dusting still casts a shadow over the entire operation. There is no way of knowing. Still, in some cases OFAC can save some wallets and accounts by ignoring dusting.

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These actions are not prohibited

Arguably, “US persons are prohibited from engaging in transactions related to Tornado Cash, including through OFAC-identified cryptocurrency wallet addresses.” Manipulating the open source code itself in a non-transactional manner is not prohibited.” This seems like a trivial matter, but it renders some of the Tornado Cash sanctions protests irrelevant. .

“For example, the copying of open source code by a U.S. person and making it available for viewing online by others, and the discussion, teaching, or inclusion of open source code in written publications is prohibited by the United States. Not prohibited by US sanctions regulations.As a textbook, no additional facts.Similarly, US persons are not prohibited by US sanctions rules from accessing the Internet archives of Tornado Cash’s past websites. Also, should the Tornado Cash website become active on the internet again, you will not be prohibited from accessing it.”

Is everything clear? Not a chance. New questions about sanctions continue to emerge, making the situation more interesting than ever. And now we know that not all the funds are lost and Dusting will not be prosecuted.Why is OFAC targeting smart his contract?The answer is still clear Is not … And that’s not why the developer was arrested.

baby steps.

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