The US Treasury Department’s decision to crack down on Tornado Cash has backfired on ordinary investors, with anyone who transacts with Tornado Cash at risk of reprisals by authorities.
Following the watchdog’s decision to pursue the company for alleged ties to money laundering. The head of legal and government affairs at TRM Labs Ari Redbord said consumers will have to be very careful.
Because of the crackdown against the platform, it’s possible for the US Treasury to go after individuals who use it to genuinely exchange currency.
Tornado Cash is mostly used by genuine investors who are interested in protecting their anonymity, but the platform also bestows a certain benefit to clandestine parties who “mix” their cryptocurrency to obfuscate the digital paper trail law enforcement can use to track stolen funds, for example.
It’s precisely this that the US Treasury is trying to go after, but in doing so, ordinary investors are getting caught in the crossfire.
Elliptic chief scientist Tom Robinson told CNBC that there was a need for solutions to help cover your tracks especially when not doing anything illicit.
Mixers are of course a hot-button topic for law enforcement. On the one hand, they serve investors who are willing to navigate the vagaries of the cryptocurrency industry without revealing too much about their own strategy, but on the other, they may end up helping criminals avoid detection.