US lawmakers urge the Treasury Department to investigate Tornado Cash and other crypto mixers for illegal financial activities

Odaily News U.S. Democratic Rep. Sean Casten of Illinois, along with lawmakers including Stephen Lynch, Brad Sherman, and Bill Foster, wrote to the Treasury Department, urging it to investigate illegal financial activities conducted through cryptocurrency mixing services, particularly Tornado Cash. The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) designated Tornado Cash as a sanctioned entity in August 2022, prohibiting financial interactions with it by people in the United States and companies that wish to operate in the United States. People in the cryptocurrency industry believe that Tornado Cash is not an individual, but software, and criticized the Treasury Department's move, arguing that it has no authority to sanction Tornado Cash. The lawmakers countered that cryptocurrency mixers "pose serious national security risks" and stated in the letter: "Despite sanctions, Tornado Cash remains online and continues to function as a decentralized smart contract." They asked the Treasury Department to answer questions about cryptocurrency mixers by December 2, including estimates of Tornado Cash activities since August 2022, whether sanctions have led to an increase in suspicious activity reports, and whether additional sanctions are being considered. (The Block)