The game of Tornado Cash Situations is like having one puzzle inside another one. Why does OFAC provide its stamp of approval to software? The only developer was taken into custody by the Dutch authorities; why was that? That is not a question to which we will provide an answer at this time. Updates from OFAC Questions that are asked most frequently about Tornado Cash and its associated topics. The answers concentrate on the particulars of the sanctions rather than answering the more fundamental problems.
Nevertheless, we will take them. They, like the Tornado Cash scenario as a whole, are both entertaining and informative in their own unique ways.
The OFAC Provides Clarification on the Tornado Cash Sanctions
The update to OFAC's Frequently Asked Questions (FAQ) that was released yesterday focused on Tornado Cash. The government of the United States activates the form to apply for a licence and states that users can recoup their funds in the following ways:
“US PERSONS OR PERSONS CONDUCTING TRANSACTIONS WITHIN US JURISDICTIONS MAY REQUEST A SPECIAL LICENSE FROM OFAC TO ENGAGE IN TRANSACTIONS INVOLVING VIRTUAL CURRENCY SUBJECTS IN ORDER TO ENGAGE IN TRANSACTIONS INVOLVING TORNADO CASH THAT BEGAN PRIOR TO ITS DESIGNATION ON AUGUST 8, 2022 BUT WERE NOT COMPLETED B US
persons should be prepared to provide, at a minimum, all relevant information on these transactions with Tornado Cash. This information includes the wallet addresses for the sender and the recipient, the transaction hashes, the transaction date and time, and the virtual currency amounts.
Therefore, there is still a chance for consumers to get their frozen cash if they are prepared to go through a few hoops and procedures like know your customer (KYC). Even if it has certain flaws, we're going to count this new development as good news. Another piece of information that appears to be positive news is that OFAC would not prioritise any procedures linked to dust.
“OFAC IS AWARE OF REPORTS FOLLOWING TORNADO CASH'S DESIGNATION THAT CERTAIN UNITED STATES PERSONS MAY HAVE RECEIVED UNSOLICITED AND NOMINAL AMOUNTS OF VIRTUAL CURRENCY OR OTHER VIRTUAL ASSETS FROM TORNADO CASH, A PRACTICE COMMONLY REFERRED TO AS “DUSTING.” This transaction will be subject to OFAC regulations from a technical standpoint.”
The haze still hangs over the operation, despite the fact that everything is going swimmingly thus far. There is no way to determine whether certain accounts have been cleaned out or whether the owner is taking advantage of the circumstance to wash the money that he has obtained through Tornado Cash. However, there are circumstances in which OFAC's refusal to punish dust will prevent many wallets and accounts from being frozen.
This Course of Action Is Not Prohibited.
“US people are forbidden from engaging in transactions with Tornado Cash, including through OFAC-identified virtual currency wallet addresses,” thus there should be no misunderstanding about this rule. However, “interacting with the open source code itself, in a manner that does not include criminal transactions using Tornado Cash, is not prohibited.” [Citation needed] This may seem like a minor issue, but it renders some of the protests against the Tornado Cash punishments moot:
“FOR EXAMPLE, US PERSONS WILL NOT BE PROHIBITED BY US SANCTIONS REGULATIONS FROM COPYING OPEN SOURCE CODE AND MAKING IT AVAILABLE ONLINE FOR OTHERS TO VIEW, AS WELL AS DISCUSSING, TEACHING, OR INCLUDING OPEN SOURCE CODE IN WRITTEN PUBLICATIONS, SUCH AS TEXTBOOKS, NO ADDITIONAL FACTS. .
Similarly, individuals residing in the United States will not be prevented from accessing historical websites related to Tornado Cash due to restrictions imposed by the United States Sanctions Regulations. Additionally, US citizens will not be prevented from accessing Tornado Cash websites in the event that they resume their online activities.
Is there nothing left to be confused? Absolutely not. As more and more issues regarding the sanctions arise, the current predicament is more intriguing than it has ever been. And at this point, we are aware that not all of the monies have been wasted, and that the dust will not be prosecuted. What is OFAC's motivation for focusing on smart contracts? The response to that question is not completely clear. In addition, this was not the grounds for the arrest of even a single software engineer.
