US Treasury clarifies publishing Tornado Cash’s code does not violate sanctions

The United States Department of the Treasury said “interacting” with cryptocurrency mixer Tornado Cash’s open-source code, with certain provisions, would not be in violation of sanctions imposed by the Office of Foreign Assets Control, or OFAC.

In the guidance posted to its frequently asked questions pages on Tuesday, the Treasury Department clarified some concerns previously voiced by many U.S.-based crypto users regarding the controversial mixer Tornado Cash. According to the government department, U.S. residents would not be violating sanctions by copying the mixer’s code, nor making it available online or publishing it through another medium.

“U.S. persons would not be prohibited by U.S. sanctions regulations from visiting the Internet archives for the Tornado Cash historical website, nor would they be prohibited from visiting the Tornado Cash website if it again becomes active on the Internet,” said the Treasury Department.

The Treasury specified that users could generally interact with the Tornado Cash code provided it didn’t involve a prohibited transaction. Those who initiated transactions using the mixer prior to sanctions being imposed on Aug. 8 can apply for an OFAC license to complete the transaction or to make a withdrawal:

“OFAC would have a favorable licensing policy towards such applications, provided that the transaction did not involve other sanctionable conduct.”

The seeming uncertainty around the U.S. sanctions and how companies were expected to be in compliance came amid many platforms removing or restricting the activity of individuals associated with Tornado Cash. One of the mixer’s co-founders, Roman Semenov, reported on Aug. 8 that his account at developer platform GitHub had been suspended. He suggested at the time that his interactions with Tornado Cash’s code might have been part of the reason, questioning “is writing an open source code illegal now?”

Here's the list of Tornado Cash resources that were banned

- Tornado Cash @GitHub organization
- personal @GitHub accounts of TC contributors
- all $USDC on Tornado Cash contracts @circlepay
- @infura_io RPC
- @AlchemyPlatform RPC
- https://t.co/SHvgEjTOMV domain @eth_limo

— ️ Tornado.cash ️ (@TornadoCash) August 9, 2022

Others have attempted to use the U.S. legal system to push back against the Treasury Department’s actions. On Sept. 8, Coinbase announced it would be supporting a lawsuit brought by Tornado Cash users against the Treasury Department, alleging it illegally sanctioned the crypto mixer’s smart contract addresses.