The US government’s ban on crypto transaction privacy tool Tornado Cash is “unconstitutional”, says Kraken CEO Jesse Powell. He believes people have a right to financial privacy and feels that sanctions will not survive the challenge in court. Powell described the government’s move as a hasty reaction.
He told Bloomberg Technology in an interview that the regulatory sanctions are not well thought through. Powell said it’s a knee-jerk reaction to protect consumers, especially after the collapse of TerraLUNA stablecoin. The executive says Tornado Cash can be equated to freedom of speech.
Powell said people can evaluate for themselves what’s really happening. He believes regulators are overreacting looking to protect people. However, Powell said Kraken would block transactions from addresses linked to Tornado Cash. The platform would prohibit withdrawals to any addresses associated with Tornado Cash and would likely freeze funds coming in from the barred address.
On the other hand, Powell reiterated that individuals have a right to privacy, and the government took that right away through its actions on Tornado Cash. The US Treasury has imposed sanctions on Tornado Cash and imposed it of repeatedly failing to set effective anti-money laundering rules. Furthermore, Alexey Pertsev the Tornado Cash developer was arrested by Dutch authorities on August 12. Reports highlight that around $7 billion – the total amount of funds – have passed through the privacy tool, but Elliptic, blockchain sleuths, says it’s just $1.5 billion.