Anonymous User Transfers ETH Funds from Tornado Cash to Several Celebrities Day after Treasury Sanction

UTC by Tolu Ajiboye · 3 min read
Anonymous User Transfers ETH Funds from Tornado Cash to Several Celebrities Day after Treasury Sanction
Photo: Dave Chapelle / Facebook

On the heels of the Treasury’s sanction, an anonymous enabler sent small amounts of ETH from Tornado Cash to several celebrities.

An anonymous crypto user transferred small amounts of Ethereum (ETH) from a sanctioned Tornado Cash address to a horde of prominent figures. This comes a day after the US Treasury sanctioned the crypto mixing tool for complicity in facilitating laundered funds.

Tuesday’s anonymous Tornado Cash ETH transfer to celebrities seems to be an attempt to undermine the Treasury’s verdict. The move also appears to be a prank intended to demonstrate the crypto industry’s absolute power. This is because users cannot stop receiving funds from the blacklisted crypto addresses without blocking the addresses.

Currently, no one knows where the defiant Tornado Cash is from. Mixing services like Tornado Cash allow users to conveniently obscure their transactions for a fee. However, according to a Twitter feed, the list of notable individuals and companies that received funds from the government-sanctioned platform include “Jimmy Fallon, Shaquille O’Neal, PUMA, Randi Zuckerberg, Logan Paul, Brian Armstrong, Steve Aoki, Ukraine Crypto Donation, Dave Chappelle and Beeple”.

Implication of Anonymous Tornado Cash ETH Transfers

Due to the sanctions, it is illegal for US persons to engage with Tornado Cash for any transactions. Willfully violating this order can attract stiff fines ranging from $50,000 to $10,000,000, and up to 30 years imprisonment. As a result, all US persons will likely be under legal obligation to block or freeze incoming Tornado transactions. The government describes US Persons as persons living on American soil, and American citizens living abroad.

However, it is unlikely that users who did not initiate or have prior knowledge of these Tornado Cash transactions will be held liable. Since blocking an incoming transfer on-chain is impossible, potential recipients of funds sent from Tornado would most likely have to block the addresses. While this might be easy for an exchange, it could be difficult for celebrities and businesses. These celebrities, businesses, and other public figures sometimes use public wallets not operated by an exchange.

Treasury Sanctions

On Monday, the Treasury Department sanctioned Tornado Cash for allowing criminals to launder vast sums in crypto. According to the federal government monetary department, the digital mixing service has facilitated money laundering worth more than $7 billion since its inception in 2019. Furthermore, Treasury also suggested that Tornado’s perceived laxity in effectively addressing the laundering issue is worrisome. As Brian Nelson, undersecretary of the Treasury for Terrorism and Financial Intelligence, put it:

“Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks.”

Furthermore, Nelson also doubled down on Treasury’s stance against crypto laundering practices, saying:

“Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them.”

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Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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