Kraken CEO Jesse Powell takes sides in Tornado Cash ban

BloombergNovember 08, 2022

The U.S. Treasury Department sanctioned the Ethereum mixing service called Tornado Cash in an unprecented shutdown, banning the Tornado Cash privacy tool outright, forbidding American citizens from using the tool or transaction with any of the wallet addresses.
The Treasury Department announced that “Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Tornado Cash, which has been used to launder more than $7 billion worth of virtual currency since its creation in 2019”.
After the ban happened a Dutch Tornado Cash developer, who was recently revealed to be Alexey Pertsev, was arrested on August 10 in the city center of Amsterdam. He was charged with facilitating money laundering due to his work on the privacy tool.
The FIOD, the Dutch financial crimes agency, suspects that Tornado Cash has facilitated large criminal money flows, including funds that were stolen by North Korean hacker groups, apparently basing themselves on information from the U.S. authorities.
Jesse Powell, the CEO of Kraken, one of the largest crypto-exchanges in the world, has taken sides and firmly challenged the U.S. government's actions in the case, calling the shutdown "unconstitutional". He is the latest in a series of industry figureheads who have publicly taken a opinion on the matter.
The regulatory landscape in the US is constantly changing and contains many uncertainties. Money laundering is of course a priority for the government and the struggles with the privacy-enhancing aspects of crypto are expected to continue. Making sure you comply to the latest regulations is critical when operating in this industry.