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Interpretation of the Toughest Crypto Sanctions in History: What Happened to Tornado Cash

background

On August 8, 2022, the official website of the Office of Foreign Assets Control of the US Department of the Treasury, referred to as OFAC, showed that it will be part of the Tornado Cash protocol or Ethereum related to it. The addresses that interact with addresses are put into the  SDN List (the list of nationals specially formulated by the United States).

Source: U.S. Treasury Department

Here is an explanation of what this SDN List: The U.S. Specially Designated Nationals List is. If added to this list, the property and property rights of individuals or related entities will be frozen under various sanctions programs administered by OFAC. 

How to sanction? 

Note that in general, U.S. persons (including U.S. citizens, legal permanent residents, entities established under U.S. law, and other organizations located in the U.S., etc.) must not conduct any transactions with SDNs and must freeze SDNs they own or control property and property interests. SDNs are also prohibited from accessing the U.S. financial system. OFAC and the U.S. State Department have both stipulated that aliens implicated in violations of the SDN ban by Americans may be subject to civil and criminal penalties under the International Emergency Economic Powers Act (IEEPA). At the same time, foreigners may also be subject to secondary U.S. sanctions if they conduct material transactions with entities on the SDN List for certain goods and services. Therefore, SDN’s transactions with non-Americans will also be adversely affected to some extent. In addition, being included in the SDN List will also cause the individual or business to suffer some reputational damage.

Reference: http://www.jcacherm.com/portal/article/index/id/6/cid/4.html  

What is OFAC?

OFAC’s mission is to administer and enforce all economic and trade sanctions based on U.S. national security and foreign policy, including financial sanctions against all terrorism, transnational drug and narcotics trade, and proliferation of weapons of mass destruction. The current OFAC…

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