Preface
In November 2024, the Fifth Circuit Court ruled that the sanctions imposed by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) on the mixing service Tornado Cash violated the International Emergency Economic Powers Act (IEEPA). The Fifth Circuit Court held that the smart contract of Tornado Cash is decentralized, self-operating, and uncontrollable code that cannot be owned, is not property, and should not be included in the OFAC sanctions list, and that OFAC's sanctions exceeded its statutory authority.
Although the Fifth Circuit Court's ruling on the Tornado Cash case is seen as a victory for the crypto industry, the undeniable fact is that North Korean hackers and coin theft criminal organizations are indeed using Tornado Cash for money laundering to evade regulatory enforcement sanctions. So, can we ensure on-chain privacy for crypto users under the premise of legality and compliance in the crypto world? Today, I will share how the mixing protocol Railgun complies with regulations to protect user on-chain privacy.