According to a Bloomberg report, the U.S. Treasury announced on March 21 that it has officially lifted sanctions against the decentralized mixing protocol Tornado Cash, which were imposed in August 2022. Ending a two-and-a-half-year regulatory dispute, the price of Tornado Cash governance token $TORN skyrocketed from $7.57 to $15.2, an increase of nearly 100%.
The controversy surrounding mixers: from sanctions to developer imprisonment
Tornado Cash is a privacy protocol on the Ethereum blockchain that allows users to transfer cryptocurrency anonymously. In August 2022, the U.S. Treasury's Office of Foreign Assets Control (OFAC) accused it of helping the North Korean hacker group Lazarus launder $455 million in illicit funds and placed the protocol on the sanctions list. In August 2023, Dutch authorities arrested core developer Alexey Pertsev and sentenced him in May 2024 to 64 months in prison for 'aiding in the laundering of $1.2 billion.' Pertsev was released in February 2025 and placed under house arrest awaiting appeal.
Alexey Pertsev
Market reaction was intense, with $18 million in shorts liquidated in one day for TORN
Data shows that the TORN token surged by 98% within 15 minutes of the announcement, reaching a high of $15.2. Subsequently, profit-taking selling pressure emerged, causing it to drop back to $10.68. On-chain analysis platform Coinglass noted that the daily short liquidation amount in the derivatives market exceeded $18 million, setting a historical record for TORN tokens.
TORN token reached a high of $15.2
The Electronic Frontier Foundation (EFF), a blockchain privacy advocacy organization, affirmed that this decision is a 'victory for decentralized technology.' However, legal experts warn that the Treasury still retains the power to impose sanctions on 'addresses clearly used for criminal activities.' The Tornado Cash community stated that it will promote a protocol upgrade to introduce a compliance review mechanism to meet regulatory requirements.
