On Tuesday, Rep. Tom Emmer (R-MN) sent a letter to Treasury Secretary Janet Yellen seeking clarification regarding the Office of Foreign Asset Control's ("OFAC") recent decision to sanction Tornado Cash's smart contract addresses ("the Letter").
As background, OFAC, an office within Treasury, recently added Tornado Cash and associated smart contract addresses to the Specially Designated Nationals ("SDN") List, thus blocking Americans from transacting with them. According to OFAC, the sanctions were aimed at preventing cybercriminals from using Tornado Cash to launder money.
The Letter seeks clarification regarding this unprecedented move because sanctions have historically been levied against persons, entities, or property—not autonomous privacy-enabling code like the smart contracts sanctioned here.
Key Quote
As background, OFAC, an office within Treasury, recently added Tornado Cash and associated smart contract addresses to the Specially Designated Nationals ("SDN") List, thus blocking Americans from transacting with them. According to OFAC, the sanctions were aimed at preventing cybercriminals from using Tornado Cash to launder money.
The Letter seeks clarification regarding this unprecedented move because sanctions have historically been levied against persons, entities, or property—not autonomous privacy-enabling code like the smart contracts sanctioned here.
Key Quote
- "I share OFAC's concerns regarding the illicit use of the Tornado Cash smart contract and appreciate OFAC's continued work to protect the security, foreign policy, and economy of the United States. The growing adoption of decentralized technology will certainly raise new challenges for OFAC. Nonetheless, technology is neutral and the expectation of privacy is normal." Letter at 4 (emphasis added).
- Whether OFAC had reason to believe the Ethereum smart contract addresses are actually owned or controlled by a person who accepts and transmits value for customers;
- If and how certain SDN listed Ethereum addresses are either aliases of a person or the property of a person;
- Whether innocent law abiding citizens using Tornado Cash for otherwise lawful personal transactions can reclaim their funds and how they should go about doing so;
- Whether innocent U.S. persons who received unsolicited funds from the SDN listed addresses are in breach of law or regulation;
- How OFAC intends to uphold the due process generally afforded to individuals and entities to appeal an OFAC sanction, considering the sanctioned addresses have no agency and cannot speak for themselves or for those whose funds they hold? See Letter at 2-3.
