Tornado Cash has been a bone of contention caught in the tussle between the pro-crypto team and policymakers around the world for a while now. It has been facing a lot of pushback from governments as their mechanism effectively cloaks the source and end points of crypto transactions, making them virtually impossible to track. Indeed, they cannot be tracked even by the most fintech-savvy nations. Due to this reason, governments around the world have been trying to enforce a crackdown against it or even try to blacklist it.
As the latest development, the administration of the United States of America has prohibited its use. Should citizens violate the ban and continue activities that utilize it, their treatment will be categorized on the same level of terror-related affairs and crime syndicate leaders. The legal tenets of such a prohibition are also being analyzed and criticized by the crypto community. But the nature of Tornado is such that crypto miscreants would love to take advantage of its loopholes, something the US says has been happening by billions worth of dollars. This comes on the heels of US strengthening consumer-centric laws around crypto, along with KYC requirements and anti-money laundering legislations.
The government said that the fact that Tornado Cash can easily be recreated by anyone wanting to cloak their financial footprint could mean catastrophic ramifications for the economy. Some crypto enthusiasts have also pointed out there seems to be some linguistic confusion in the fine print of this prohibition. But the general consensus seems to be that those who seek to reconnect with the service would be landing in legally disastrous waters.