Democratic legislators in the US House of Representatives have pushed the Treasury Department to clarify its efforts to curtail the operations of Tornado Cash, a cryptocurrency mixer sanctioned in 2022 for supporting illicit activity.
In a letter dated November 14, congressmen, including noted cryptocurrency critic Brad Sherman, expressed concern about the platform’s continued operation despite restrictions. Tornado Cash processed $1.8 billion in deposits in the first half of 2024, a 45% increase from 2023.
The senators emphasized the platform’s role in laundering money for rogue governments, cybercriminals, and terrorist organizations. Tornado Cash’s decentralized architecture sustains its operations, in contrast to centralized mixers like Blender and Sinbad, which faced closure due to penalties.
The letter demanded extensive details from the Treasury, including estimates of Tornado Cash’s unlawful activity since its sanctioning, enforcement actions against people who use the service, and potential secondary sanctions for non-US businesses interacting with mixed money. They also asked for information on potential regulatory measures, such as forcing financial institutions to keep records of mixer transactions and whether present enforcement mechanisms are adequate.
Lawmakers have asked for a response and a staff briefing by December 2, highlighting the need to investigate Tornado Cash’s operations and the ramifications for global financial security.
Crypto privacy activists, who argue that decentralized platforms like Tornado Cash should not be considered businesses under US law, have prompted this examination. In April 2025, Roman Storm, the co-founder of Tornado Cash, will face a trial on allegations of money laundering and sanctions violations.
The case emphasizes the challenges of implementing legislation in the decentralized finance area, as well as the importance of powerful tools for combating criminal activity in the growing crypto ecosystem.
