The link to the governance forum of Tornado Cash started displaying an invite error message, whose origin nobody knows yet. The dYdX trading platform said it had suspended accounts of users previously interacting with the privacy platform.
The Office of Foreign Assets Control (OFAC) of the US Treasury Department recently sanctioned cryptocurrency mixer Tornado Cash. Social media reports indicate that the Discord server of the platform has stopped operating, as happened with its DAO website.
The DAO of the Platform Goes Offline
Following the sanctions by the OFAC, several entities have distanced themselves from the services of Tornado Cash. In addition, some assets of the Ethereum-based platform have become inaccessible to its users.
The DAO of the platform has brainstormed ideas to circumvent its current status and remain afloat. The DAO forum reportedly went offline shortly after a community vote proposing that the DAO members be signatories to a multi-signature wallet.
The proposal received unanimous approval, although the wallet of the Treasury manages assets worth about USD 22 million. The proponent said moving to a 4-of-6 system would make it easier to approve the transaction process. They would continue having access to the community fund regardless of what may happen to two of the signatories.
However, the community Discord server went offline after the link to the governance forum started displaying an error message. That situation led visitors to an invite error message whose origin is still unknown.
The Ban on Tornado Cash Has Negative Effects
Many speculate that this is the latest of many actions against the cryptocurrency mixer from various entities. Roman Semenov, the co-creator of Tornado Cash, revealed that the development platform Github had frozen his account following the announcement of the ban.
After that, Tornado Cash said on Twitter that the same had happened to personal Github accounts for its contributors. The dYdX trading platform also stated that it had suspended accounts of users previously interacting with the privacy platform. Furthermore, node providers Alchemy and Infura.io blocked remote procedure call requests to the sanctioned platform.
Another entity that distanced itself from the cryptocurrency mixer was the centralized stablecoin network Circle. Jeremy Allaire, its CEO, shared that the company had frozen over USD 75,000 worth of assets in 44 Tornado Cash addresses.
The Dutch authorities recently arrested Alexey Pertsev, software developer of Tornado Cash, for allegedly allowing illicit activity on the platform. The financial crime agency of the Netherlands accused the 29-year-old expert of facilitating money laundering by users.
The United States Bans Software for the First Time
Industry operators have not yet accepted the sanctions. Omid Malekan, Columbia Business School Adjunct Professor, said this is the first time the US government has criminalized interaction with the software.
Acknowledging the concerns of the Treasury, Omid stated that there is evidence of criminals using Tornado Cash to launder funds. The professor, who teaches about cryptocurrencies and blockchain, noted that the mixer has valid applications. He thinks the United States has taken a significant step regarding sanctions against individuals, companies, and governments.
By Alexander Salazar