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Tornado Cash User Continues to Send ETH to Prominent Figures, Buterin Admits He Used the Mixer

Last updated: October 23, 2023 08:51 EDT

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Ruholamin Haqshanas

Author

Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

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Last updated:

October 23, 2023 08:51 EDT

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An anonymous user is continuing to send small amounts of ethereum (ETH) from a Tornado Cash wallet to the public addresses of prominent figures, ranging from celebrities to crypto CEOs, presumably as a way to protest against the US Treasury‘s decision to sanction the mixing service. Meanwhile, Ethereum co-founder Vitalik Buterin has publicly admitted that he used Tornado Cash in the past, and for good causes.

One day after the US Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on crypto mixer Tornado Cash for its alleged role in money laundering operations, an anonymous user, or a group of users, started sending ETH 0.1 transactions from the mixer to prominent figures.

Some of the more notable figures include American television host Jimmy Fallon, crypto exchange Coinbase CEO Brian Armstrong, basketball star Shaquille O’Neal, Mark Zuckerberg’s sister Randi Zuckerberg, and a range of other well-known celebrities such as Logan Paul and Beeple.

Etherscan transactions further show that almost all major crypto exchanges, including Binance, FTX, Kraken, OKX, Bitfinex, Gate.io, and Gemini, have received small amounts of ETH from Tornado Cash. Furthermore, even the Ethereum Foundation‘s treasury and the official Ukrainian crypto donation accounts have been included.

Notable individuals/companies who just received funds from a government-sanctioned entity:

– Jimmy Fallon
– Shaquille O'Neal
– PUMA
– Randi Zuckerberg
– Logan Paul
– Brian Armstrong
– Steve Aoki
– Ukraine Crypto Donation
– Dave Chappelle
– Beeple

Field day for investigators. https://t.co/9HDJmppzT2
— FatMan (@FatManTerra) August 9, 2022

As part of the sanctions, all Americans, as well as US-based companies, are barred from interacting with Tornado Cash. A failure to comply could lead to penalties of USD 50,000 to USD 10,000,000 in fines and 10 to 30 years imprisonment.

“U.S. persons and persons otherwise subject to OFAC jurisdiction, including firms that facilitate or engage in online commerce or process transactions using digital currency, are responsible for ensuring that they do not engage in unauthorized transactions prohibited by OFAC sanctions, such as dealings with blocked persons or property, or engaging in prohibited trade or investment-related transactions,” the Treasury’s website reads.

Notably, since the receipt of tokens from Tornado Cash is not willful and comes without any prior knowledge or engagement, it seems unlikely that it could be considered a violation of the sanctions. However, its consequences still remain unclear.

Meanwhile, Buterin has joined the cult of users criticizing the sanctions against Tornado Cash, saying that the privacy tool could also be used for good causes. In particular, the Ethereum mastermind said he used the mixer to donate to Ukrainian causes while protecting the recipients. “I’ll out myself as someone who has used TC to donate to this exact cause,” he wrote.

In a follow-up tweet, the Russian-born programmer said he did not use the mixing service to protect himself.

My intent was protecting the recipients, not myself. The RU government knows my positions on the Ukraine issue anyway:https://t.co/nkgrqVY2au
— vitalik.eth (@VitalikButerin) August 9, 2022

Meanwhile, US-based blockchain analysis company Chainalysis argued that, since becoming active in August 2019, Tornado Cash has received over USD 7.6bn worth of ETH, “a sizable portion of which have come from illicit or high-risk sources.”

Per their report,

“Half of those funds came from DeFi protocols, but 18% came from sanctioned entities (almost entirely, we should note, before those entities were sanctioned), while just under 11% were funds stolen from other cryptocurrency services and protocols.”

Despite the outcry, several major crypto entities have taken action to comply with the Treasury’s sanctions. For one, Circle, the issuer of the USDC stablecoin, has frozen over USDC 4m linked to 81 addresses sanctioned by the OFAC.

Web3 development platforms Alchemy and Infura have reportedly also blacklisted the sanctioned Tornado Cash addresses, while programming depository vault GitHub has removed the source code for Tornado Cash while suspending the account of its founder Roman Semenov.