What Is Web3 Good For?
The current financial system works just fine for criminals, but poorly for millions of others around the world, including dissidents in closed societies. By thoughtfully harnessing new blockchain-based tools, we could finally start to eliminate the old tradeoff between financial privacy and security.
WASHINGTON, DC – The US Department of the Treasury’s Office of Foreign Assets Control recently sanctioned a technology called Tornado Cash, on the grounds that it “has been used to launder more than $7 billion worth of virtual currency since its creation in 2019.”
Such enforcement measures are nothing new. But what makes this case unique is that Tornado Cash is a piece of open-source software.
Essentially an automated tool, Tornado Cash mixes digital assets and redistributes them to preserve privacy. While we don’t know everything about Tornado Cash or why it was created, we do know that large sums of digital assets linked to illicit activity have moved through the protocol since it was launched, including millions stolen by North Korean hackers. Any American who uses the service now faces up to 20 years in prison.