“A Major Policy Issue”: Circle CEO Criticizes Tornado Cash Sanctions
Circle CEO Jeremy Allaire said that the sanctions against Tornado Cash mark a major turning point for the Internet and the crypto industry.
Key Takeaways
- Circle CEO Jeremy Allaire has criticized the U.S. Treasury’s decision to sanction Tornado Cash, saying that sanctioning open source software marked a pivotal point in the history of the Internet.
- Allaire called on industry leaders, lawmakers, and developers to come together to establish a policy framework that would protect consumer privacy.
- Circle froze about $75,000 worth of USDC in wallets associated with Tornado Cash following the U.S. Treasury’s decision to sanction the protocol.
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Circle quickly complied with the U.S. Treasury’s decision to sanction Tornado Cash, but its CEO is calling on industry leaders to establish a privacy-enabling policy framework.
Circle CEO Comments on Treasury Sanctions
Crypto industry leaders are speaking out against the U.S. Treasury decision’s to ban Tornado Cash.
Circle co-founder and CEO Jeremy Allaire joined a growing list of major crypto players to weigh in on the issue today, posting a tweet storm expressing his concerns about the Treasury’s move to ban sanction all Ethereum addresses associated with the popular cryptocurrency mixer.
The Treasury announced that it had banned Tornado Cash and its smart contracts Monday. In a press release, the U.S. government department described the protocol as “a virtual currency mixer that launders the proceeds of cybercrimes.” It said that $7 billion had been laundered through the protocol since it launched.
Tornado Cash is an Ethereum-based protocol that helps users preserve their privacy by obfuscating their transaction history. Though it’s a popular tool within the Ethereum community, it’s also been used multiple times by hackers, including the North Korean state-sponsored cybercrime syndicate Lazarus Group, as it offers a way to launder crypto assets with relative ease.
According to Allaire, the sanctions mark a pivotal point in the history of the Internet and blockchain technology because the U.S. government targeted a piece of open source software rather than a specific entity. Allaire said that the move raises “extraordinary questions about privacy and security on the Internet.”
Allaire indicated in a Tuesday blog post that while Circle had an obligation to comply with the law, he thought sanctioning protocols was a “major policy issue.” He stated that Circle would call on crypto industry leaders, lawmakers, associations, developers and regulators to develop a legal framework and policies that would protect consumer privacy while respecting the “principles of financial integrity… designed to thwart bad actors.”
In response to the Treasury’s ban, Circle quickly complied and blacklisted the sanctioned addresses, freezing more than $75,000 in USDC in the process. Other entities such as Github, Infuria, and Alchemy have since followed suit.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
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