TORN, the native token of privacy protocol Tornado Cash, has experienced a significant surge in value after being removed from the US sanctions list. The Office of Foreign Assets Control (OFAC) announced on March 21 that it had delisted several Ethereum wallet addresses associated with the protocol, marking a crucial moment for Tornado Cash.
The decentralized platform, which has faced intense scrutiny and sanctions since 2022, saw TORN’s price skyrocket by 71% to $12.9 within 24 hours of the announcement. The crypto community celebrated the news, viewing it as a victory for privacy-focused technologies and decentralized finance (DeFi).
Tornado Cash operates as a decentralized protocol designed to enhance privacy for Ethereum users by allowing them to mix their assets with others in a shared pool before withdrawal, making transaction tracking more challenging. However, in 2022, OFAC sanctioned the protocol, alleging its use by bad actors, including North Korea’s Lazarus Group.
A federal court in Texas ruled in January 2025 that Tornado Cash’s smart contracts could not be subject to sanctions, emphasizing their autonomy, lack of ownership, and independence from any central authority. This immutability makes it impossible to shut down or selectively restrict the protocol, a crucial point that weakened OFAC’s case. The ruling highlighted that while privacy protocols can be misused, the code itself is beyond traditional regulatory control.
OFAC’s recognition of this fact in its statement reflects a broader reassessment of how financial sanctions apply in a decentralized and immutable code environment. Despite Tornado Cash’s removal from the sanctions list, the US Treasury remains focused on combating money laundering, particularly by North Korean cybercriminals like the Lazarus Group.
The Lazarus Group, a state-sponsored hacking unit, has stolen billions from cryptocurrency platforms and allegedly used these funds to support North Korea’s nuclear and ballistic missile programs. Treasury Secretary Scott Bessent emphasized the importance of securing the digital asset industry from abuse by illicit actors to ensure US leadership in financial innovation and inclusion.
Overall, Tornado Cash’s legal victory and removal from the sanctions list signal a positive development for privacy-focused technologies in DeFi. The ongoing efforts to combat malicious cyber activities, particularly by entities like the Lazarus Group, underscore the importance of regulatory vigilance in the digital asset space.
