US government allows some to withdraw cryptocurrency from Tornado Cash mixer

On September 13, the U.S. Treasury Department announced a way for users of the sanctioned cryptocurrency mixer Tornado Cash to get their money back. To do this, it is necessary to apply for a license from OFAC (the US Office of Foreign Assets Control).

«For Tornado Cash-related transactions started before the service was blacklisted on August 8, 2022, but not completed by this date (September 13), Americans or other persons conducting transactions within the US jurisdiction may request a special license from OFAC to conduct virtual currency transactions,» the regulator said in a statement.

According to the press release, in order to obtain a permit to withdraw cryptocurrency assets, the user must provide OFAC with information on related transactions. In particular, a special form must specify the addresses of the sender’s and recipient’s wallets, the amount of the transfer, transaction hashes, as well as the date and time of the transaction. The agency emphasized that it intends to «pursue a favorable policy towards such requests» if they are not related to other sanctions actions.

The arrest of the founder of the cryptocurrency mixer Tornado Cash, Alexey Pertsev, on August 10 caused a flurry of criticism in the cryptocurrency community. Industry professionals began to worry that they could be held accountable for any open source software they develop. However, the protests subsided after the developer was accused of having ties to the FSB. Some defenders of the service were not deterred, and with the support of the cryptocurrency exchange Coinbase, they sued the government. on August 24, law enforcement officers decided to keep Pertsev in custody for another three months pending trial. It should be added that the Tornado Cash developer has not yet been formally charged.