Key Takeaways:
- An anonymous cryptocurrency user sent ETH to celebrities and well-known crypto figures from a permitted address.
- Wallets under the control of TV host Jimmy Fallon, clothing company Puma, Coinbase CEO Brian Armstrong, and one designed to make donations to Ukraine are among those impacted.
- Tornado Cash was sanctioned Monday by the Treasury Department’s Office of Foreign Asset Control (OFAC).
Just after yesterday’s sanctions by the U.S. Treasury, someone has been using Tornado Cash to withdraw ETH into the wallets of several prominent crypto identities. The stunt’s implications are not entirely clear, but they may be severe and extensive.
The US sanctions against Tornado Cash do not affect EU citizens, but the upcoming EU regulation will classify mixers as high-risk transactions. Connected assets may require justification, be reported to financial supervisors, and be difficult to exit from.
Since yesterday, when the U.S. Treasury Department formally imposed sanctions against the well-known Ethereum mixer, one user operating under the guise of an address starting with the number 0x12d6 has used the Ethereum protocol to send 0.1 ETH to numerous wallets belonging to prominent cryptocurrency users.
The smart contract started to send periodic transactions of 0.1 ether (ETH) to well-known people like Coinbase CEO Brian Armstrong and American television host Jimmy Fallon. The Tornado Cash design makes it impossible to identify the origin of the transactions, so either one person or several people or organizations could be associated with the procedure.
The list is quite long; Anthony Sassano, Steve Aoki, Cozomo de’ Medici, Logan Paul, and Beeple are also part of it.
Even though the perpetrator is unknown, the stunt might have been the brainchild of Twitter user depression BTC (@depression2019), who claimed yesterday that they had “been compiling a pretty big list” of notable Crypto Twitter users’ ETH addresses and Ethereum Name Service domain names and planned to withdraw ETH from Tornado Cash to an unspecified number of them.
Sanctions prevent U.S. individuals or organizations from conducting blockchain or commercial transactions with Tornado Cash’s smart contract addresses. Willful noncompliance is punishable by fines of $50,000 to $10,000,000 and prison terms of 10 to 30 years.
This indicates that controlled players (such as exchanges) will need to ask you to vindicate the use of these mixers before deciding to accept (or not accept) the transfer if you sent assets through them like Tornado Cash.
“U.S. persons and persons otherwise subject to OFAC jurisdiction, including firms that facilitate or engage in online commerce or process transactions using digital currency, are responsible for ensuring that they do not engage in unauthorized transactions proscribed by OFAC sanctions, such as dealings with blocked individuals or property, or interacting in banned trade or investment-related transactions,” according to guidance from the Treasury’s website.
The regularity of the transactions suggests that the sender(s) may be launching a practical joke to draw law enforcement’s attention to the recipients. The Treasury sanctions, however, call for “willful” interaction with the blacklisted smart contract addresses as a prerequisite for potential legal action.
It is therefore unlikely that receiving Tornado Cash tokens for free, without their knowledge or consent, could be considered a violation of the sanctions.
The Ethereum user who pulled the stunt seems to be acting in flagrant violation of American sanctions, but it’s not clear from the dusting whether or not the receiving wallets are also at fault for breaking the law.
The Sanctions for Chainalysis Oracle can confirm whether a cryptocurrency wallet address is listed in a sanctions designation from the US, EU, or UN. Roman Semenov, a co-founder of Tornado Cash, later clarified that the instrument only restricts access to the DApp interaction and not the fundamental smart contract.
