NewsCoins

This Week on Crypto Twitter: Tornado Cash Sanctions Slammed, Vitalik Criticizes MakerDAO Proposal

The prices of leading cryptocurrencies began to rebound, but the state of the industry still gave Crypto Twitter plenty to criticize. 

3 min read
Image: Dmitry Demidko on Unsplash
Illustration by Mitchell Preffer for Decrypt

While many leading coins have blown up by double-digit percentages over the last seven days, there was relatively little celebration on Crypto Twitter. Much of this week’s social media commentary instead concerned the U.S. Treasury Department’s decision to ban American citizens from using crypto privacy mixer Tornado Cash or transacting with Ethereum addresses linked to its community. 

The Treasury said these measures were taken because criminals had used the service “to launder more than $7 billion worth of virtual currency since its creation in 2019.” One Tweeter highlighted that roughly the same amount of money was locked up in Tornado when sanctions hit. 

Twitter user Harry.eth (@sniko_), who works for security at MetaMask, said the Treasury Department can’t sanction all of Tornado. It still exists on layer 2 protocols. 

 

On Tuesday, Ethereum founder and Russian national Vitalik Buterin admitted he’d used the protocol to donate money to Ukraine. 

 

The Tornado ban may prove difficult for enforcers. On Tuesday, reports emerged that an anonymous Tornado user was dusting “hundreds” of Tornado wallets and sending small amounts of Ethereum to industry leaders and celebrities despite the ban. 

 

Notorious on-chain gumshoe Fat Man Terra provided a list of the benefactor’s celebrity recipients so far. 

 TRON CEO Justin Sun got blocked by Aave as a result of Tornado’s mysterious benefactor. 

UniSwap inventor Hayden Adams stressed his belief in the need for privacy tools in our lives. Adams also called the sanctions a “freedom of speech issue,” echoing several industry leaders on Twitter, who cite the 1996 Federal court case “Bernstein v U.S.,” which established “source code as speech” protected by the First Amendment. 

It should also be noted that Github—the code platform that hosted Tornado Cash’s code—also took action on Monday. Github removed Tornado’s code and suspended Tornado Cash founder Roman Semenov’s account. 

Finally, on Friday, the Netherlands Crime Agency (FIOD) reported arresting a “suspected” Tornado Cash developer. The news made waves on Twitter, with the crypto community and privacy advocates decrying the move as a declaration of war on coders.

Elsewhere…

Joel Miyazawa, a governance analyst at crypto intelligence firm Messari, can’t understand why the UniSwap community is so divided over a $74 million proposal to form a UniSwap Foundation separate to the exchange. 

 

The Tornado Cash sanctions resulted in USDC issuer Circle freezing all USDC in wallets on the government’s sanctions list. This prompted MakerDAO to reconsider its exposure to Circle, the centralized issuer of USDC. MakerDAO’s stablecoin DAI is currently pegged to USDC.

But Ethereum creator Vitalik Buterin quickly gave his opinion on the proposal, calling it "a risky and terrible idea."  

 Chinese blockchain journalist Colin Wu elaborated more on the story on Friday. 

Finally, The Ethereum Merge has a definite date now. 

 Well… More or less.

 

Stay on top of crypto news, get daily updates in your inbox.