Co-Founder of Ethereum Vitalik Buterin said He used Tornado Cash to donate to Ukraine. This comes just a day after the US Treasury Department blacklisted cryptocurrency mixing services for facilitating money laundering.
Buterin’s comments were in response to a tweet by Jeff Coleman, co-founder of a startup called Counterfactual, who said such donations are a “legitimate need for financial privacy” that Tornado Cash can facilitate. It is a good example of
“Even if the government you live in fully supports, you may not want to. [the] The Russian government needs to know the details of your actions,” Coleman said.
Department of the Treasury Office of Foreign Assets Control (OFAC) Added Tornado Cache It will be added to the list of Specially Designated Nationals on Monday, effectively banning all individuals and entities from using the service.
OFAC claimed that Tornado Cash has laundered more than US$7 billion worth of cryptocurrencies since its founding in 2019.
A crypto mixer is a service that allows users to feed crypto into a large pool and withdraw the same amount (minus fees) to multiple wallets, obscuring the source of the original token.
Proponents of the cryptomixer argue that not all funds passing through the service are illegal, with some, including research director at Coincenter Peter Van Valkenberg, going so far as to call the ban unconstitutional. .
At the presentation at ZCON3, Falkenberg argued that: Banning the release of software is a restriction of speech and therefore unconstitutional, as is a ban on lawful transactions made to preserve one’s privacy for political purposes.
People in both Russia and Ukraine turned to cryptocurrencies as a store of value as the currencies of both countries fell significantly in the immediate aftermath of the Russian invasion.
Within Ukraine, activists and volunteers With the country’s financial system so strained, the group is using cryptocurrencies to crowdsource donations to fund its defense against Russian aggression.
Recognizing the potential of cryptocurrencies to support Ukraine’s defense and humanitarian efforts, Ukrainian President Volodymyr Zelensky signed into law the Virtual Assets Bill in March. legalized cryptocurrencies.
Buterin said his intentions The government of Buterin’s birth country, Russia, was already aware of Buterin’s position on Ukraine, so the service was used to protect the recipient, not himself.
a Recent Reports on Crypto Mixer According to data aggregator Chainalysis, the amount of money transferred to crypto mixers reached an all-time high of $51.8 million in April of this year.
in an interview with Forst Last week — ahead of OFAC’s decision — Kim Grauer, head of research at Chainalysis, said she believes it’s only a matter of time before lawmakers intervene.
“Due to the gravity of the situation and the villains involved, it has become almost trivial for law enforcement to have to grapple with this issue,” Grauer said.
The Chainalysis report recommends that any regulation must strike a difficult balance between protecting the digital privacy rights it offers while addressing its clear utility against illegal activities.