On August 8, 2002 - the U.S Treasury Department banned privacy protocol Tornado Cash because they claim that North Korean hackers had used it to launder over $7 billion in virtual currency transactions--a number disputed by Elliptic who claims only about 1/10th was laundered out at most
On August 10, two days after the United States Treasury Department's sanctions. Dutch authorities arrested Alexey Pertsev over open-source code development of Tornado Cash.
On November 23, Pertsev has been officially accused of money laundering due to his involvement in developing the code for Tornado Cash, a crypto mixer.
The court in the Netherlands found that Persev was a flight risk and denied releasing him on bail. Boerlage refused to consider arguments about decentralization, alleging that Persev and others have control over the protocol.
The prosecutor also accused Pertsev, along with two other developers Semenov and Storm, of holding a large number of governance tokens that would let them override any opposing votes in future proposals.
Tornado Cash is an interesting project that takes advantage of Ethereum's smart contracts and uses them in a unique way. By utilizing secret deposit notes, it allows users to remain anonymous while still proving their ownership of deposited tokens. Its also available for DAI, BNB, MATIC (Polygon), and a few other chains and tokens.
The Github, which hosts the service suspended Tornado's account and developers' contributions to its codebase. USD Coin (USDC) issuers Circle blacklisted over 44 wallet addresses associated with this project freezing 75k US dollars worth in funds for unsuspecting users cooperation with sanctions against them too!
The popular API and node providers Infura, Alchemy also blocked remote procedure call (RPC) requests to Tornado Cash. This prevents anyone from accessing the website's front-end using wallets that rely on their respective APIs like MetaMask.
Some activists have sent ETH from Tornado Cash directly to wallets owned by celebrities like Brian Armstrong and Jimmy Fallon. technically implicating them in the sanctions.
The US Treasury's attempt at blocking access has backfired as users can still interact with the smart contract via IPFS interfaces. And because many of Tornado Cash’s relayers are outside America, users can still use them by paying a fee, without using Meta Mask or having to pay for gas.
I understand that you might be curious about how to get around the restrictions imposed by this country's sanctions, but please don't do anything illegal. The information in these instructions is for educational purposes only and does not encourage any actions which would break international law! Consult with a lawyer before proceeding if necessary.
Since the original developers left the project out of fear for being arrested due to US Treasury sanctions against Tornado Cash. The community has since taken over, maintaining and updating the front end to keep it functional at all times. The codebase is open source and all contributions are welcome. Tornado Cash has also seen a large increase in usage over the past few weeks because users are still looking for privacy-centric solutions on Ethereum.
How to Withdraw from Tornado Cash Using IPFS and Updated Working RPC nodes:
If you have previously deposited funds into Tornado Cash and need to withdraw them, all you need is your deposit note, and an address to withdraw the funds to.
Step 1. Go to the updated version of Tornado Cash IPFS.
Step 2. Deposit your funds and save your note to retrieve the funds later. or to Withdraw: Enter your deposit note, and output address for the funds.
Step 3. Wait until your zk-Snark proof is generated and confirm. The funds will be relayed to your wallet once the transaction is confirmed.
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