Sanctions are put in place by the U.S. government to prevent activities like money laundering and funding terror groups. The New York Federal Reserve has found that sanctions against Tornado Cash have had an impact on its usage.
Tornado Cash is a crypto mixer that allows for private transactions online. The big question surrounding Tornado Cash is whether people should have the right to transact privately online and how mixers fit into this right. The New York Federal Reserve examined the effects of the Office of Foreign Asset Control’s sanctions against Tornado Cash.
When a person or entity is sanctioned, U.S. citizens, residents, or entities are banned from engaging with the sanctioned party. After Tornado Cash was blacklisted, its usage dropped by 90%. However, over the past two years, its usage has started to recover, especially in smaller pools.
The report highlights that sanctions compliance increased after a court ruling in August 2023 confirmed Tornado Cash as an entity under OFAC’s definitions. The main entities not complying with the sanctions are those who have ideological issues and believe in censorship-resistance. As a result, Tornado Cash’s privacy functionality has deteriorated.
The paper also mentions that blocks containing Tornado Cash transactions generate lower fees than blocks that don’t. Validators processing these blocks may be motivated by philosophical reasons rather than profit.
In other news, the DJT token, a Solana-based coin associated with Martin Shkreli and Donald Trump’s sons, experienced a significant drop in value. There have also been developments in the tech industry, with Nvidia employees discussing scraping various sources to train AI products and a federal judge ruling that Google maintained an illegal monopoly in its search business.
Additionally, there was a massive prisoner swap involving the U.S., Germany, Slovenia, and Russia, leading to the release of individuals like Evan Gershkovich and Paul Whelan. Political unrest in Bangladesh and ongoing riots in the U.K. have also been reported.
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