Plain English
Tornado Cash was a non-custodial Ethereum privacy mixer launched in 2019. Used zero-knowledge proofs to break the on-chain link between deposit and withdrawal addresses. In August 2022, OFAC sanctioned Tornado Cash smart contracts and the developer Roman Storm was charged with criminal conspiracy.
How it actually works
Users deposited fixed amounts (0.1, 1, 10, 100 ETH) into a pool; withdrew to a new address using a zero-knowledge proof of deposit ownership. The protocol itself never custodied funds. North Korea’s Lazarus Group laundered hundreds of millions through Tornado Cash, triggering the sanctions. A 2024 federal court ruling overturned the OFAC sanctions on the smart contracts (immutable code), though the developer prosecution continued.
What it means for you
Tornado Cash is the cautionary tale for crypto privacy tools. Even legitimate privacy use carried legal risk after OFAC sanctions. For HNW users seeking financial privacy through compliant means, today’s options are different: Privacy Pools, Aztec Protocol, and Railgun maintain compliance-friendly designs that screen against sanctioned addresses.
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Educational content only. Not investment, tax, or legal advice.