According to Deep Tide TechFlow news on November 19, multiple Democratic representatives in the U.S. have requested a response from the Treasury Department regarding its handling of the cryptocurrency mixing service Tornado Cash. Tornado Cash was sanctioned in 2022 but continues to operate.
In a letter dated November 14, lawmakers pointed out that despite being sanctioned, Tornado Cash remains online and continues to operate as a decentralized smart contract. The use of the mixer has seen a 'resurgence' this year, with Tornado Cash processing $1.8 billion in deposits in the first half of 2024, a 45% increase compared to the entire year of 2023.
Lawmakers cited several examples of Tornado Cash providing mixing services to rogue states, terrorist organizations, and cybercriminals, and requested that the Treasury Department provide estimates of illegal activities conducted through Tornado Cash since the sanctions, details on enforcement actions against users and exchanges utilizing the service, and whether it is considering potential secondary sanctions against non-U.S. persons or exchanges interacting with mixed funds.
Lawmakers also requested suspicious activity reports and statistics and inquired whether the Treasury Department has sufficient enforcement tools, asking for a response and staff briefing by December 2, 2024.
