After Tornado Cash was sanctioned by the United States, its users rushed to get their funds back. According to The Block Research, users have withdrawn $62 million from the protocol, with $14.7 million being withdrawn in the first three hours alone, and the amount of cryptocurrencies held in Tornado Cash wallet addresses has dropped by 15 percent. At the same time, users reduced their deposits, depositing only $6 million after the sanctions, a sharp drop of 78.5% compared to the previous week.
Blocker earlier reported that the U.S. Treasury Department announced sanctions on the mixer Tornado Cash on the 8th local time, barring U.S. citizens from using the service and accusing the platform of laundering more than $7 billion in cryptocurrencies since 2019, including $455 million stolen by North Korean hacker group Lazarus Group. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has placed Tornado Cash’s website, along with multiple USDC and Ethereum wallet addresses, on a Sanctions List (SDN) that prohibits all U.S. citizens and entities from trading with Tornado Cash or any ether in connection with the protocol. Square wallet address to interact. Meanwhile, the U.S. Treasury Department ordered an asset freeze on Tornado Cash and said anyone using the service within U.S. jurisdiction would be subject to civil and potential criminal penalties.
Following the news, Circle, the issuer of the U.S. dollar stablecoin USDC, said it had frozen 44 wallet addresses related to Tornado Cash, involving assets estimated to be worth more than 75,000 USDC. Decentralized derivatives trading platform dYdX also confirmed that it will block Tornado Cash-related accounts and accounts that have funds interacting with their accounts.
MakerDAO co-founder Rune Christensen said that MakerDAO may choose to sell all of the USDC in the protocol. According to online data, 60% of the collateral assets behind DAI are currently USDC. Rune Christensen posted on the community’s Discord that the sanctioning of Tornado Cash prompted him to think of decoupling from the U.S. dollar, meaning considering selling all the USDC in the agreement. Christensen also mentioned that the sanctions incident was more serious than he expected, “We will discuss this on the conference call (selling all USDC in the agreement), but I think we should seriously consider preparing to decouple from the dollar … It is almost inevitable of.”
Regarding the idea of the MakerDAO co-founder, Vitalik Buterin, the co-founder of Ethereum, said of the proposal: “This seems to be a risky and scary idea. Once ETH falls sharply, the value of the collateral will fall sharply, but CDP cannot be liquidated, so The whole system is at risk of becoming a ‘fractional reserve’.”
