Following the Treasury Department’s sanctions of crypto mixer Tornado Cash, many U.S. residents and citizens were cut off from crypto assets on the crypto mixer on the Ethereum blockchain. Now, the Treasury has released procedures for these people to reclaim their crypto assets.
The Treasury’s Office of Foreign Asset Control (OFAC) updated its “frequently asked questions” (FAQ) page last week to provide guidance for people trying to recover assets that were not removed from the crypto mixer before the Aug. 8, 2022, sanctions took effect.
“For transactions involving Tornado Cash that were initiated prior to its designation on Aug. 8, 2022, but not completed by the date of designation, U.S. persons or persons conducting transactions within U.S. jurisdiction may request a specific license from OFAC to engage in transactions involving the subject virtual currency,” the Treasury Department’s FAQ page read. “U.S. persons should be prepared to provide, at a minimum, all relevant information regarding these transactions with Tornado Cash, including the wallet addresses for the remitter and beneficiary, transaction hashes, the date and time of the transaction(s), as well as the amount(s) of virtual currency. OFAC would have a favorable licensing policy towards such applications, provided that the transaction did not involve other sanctionable conduct.”
The sanctions saw immense backlash from the crypto industry, with some expressing concern over the issue of sanctions being placed on a software and the effect this had on the people using Tornado Cash for legal purposes losing access to their property.
The FAQ update also addressed the fact that people, as a form of protest, began sending crypto assets to celebrities via Tornado Cash after the sanctions were announced. The FAQ stated that while U.S. persons “are prohibited from engaging in” any transaction that involves Tornado Cash, if a U.S. person receives a small amount unsolicited, they don't have to immediately report the transaction, OFAC said.