This week on Crypto Twitter Tornado Cash Sanctions Imposed Vitalik

This week on Crypto Twitter: Tornado Cash Sanctions Imposed, Vitalik Criticizes MakerDAO Proposal – Decrypt

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Illustration by Mitchell Preffer for Decrypt

While many leading coins have blown up by double-digit percentages over the past seven days, there has been relatively little celebration on Crypto Twitter. Much of this week’s social media commentary instead concerned the US 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 Department said these actions were taken because criminals had used the service to “launder more than $7 billion worth of virtual currencies since its inception in 2019.” A tweeter emphasized that roughly the same amount of money was trapped in Tornado when sanctions were imposed.

Twitter user Harry.eth (@sniko_), who works for security at MetaMask, said the Treasury Department cannot sanction the entire tornado. It still exists on layer 2 protocols.

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

The tornado ban could prove difficult for enforcers. Reports surfaced Tuesday that despite the ban, an anonymous Tornado user dusted off “hundreds” of Tornado wallets and sent small amounts of Ethereum to industry leaders and celebrities.

The infamous on-chain welly Fat Man Terra provided a list of the benefactor’s previous celebrity recipients.

TRON CEO Justin Sun has been blocked from Aave due to Tornado’s mysterious benefactor.

UniSwap inventor Hayden Adams emphasized his belief in the need for privacy tools in our lives. Adams also called the sanctions a “free speech issue,” echoing several industry leaders on Twitter who cited the 1996 federal court case “Bernstein v. U.S.,” which designated “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 the account of Tornado Cash founder Roman Semenov.

Finally, on Friday, the Dutch criminal investigation agency (FIOD) reported the arrest of a “suspected” developer of Tornado Cash. The news made waves on Twitter, with the crypto community and privacy advocates denouncing the move as a declaration of war on programmers.

Elsewhere…

Joel Miyazawa, a governance analyst at crypto intelligence agency Messari, cannot understand why the UniSwap community is so divided over a $74 million proposal to create a UniSwap foundation separate from the exchange.

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

But Ethereum creator Vitalik Buterin was quick to comment on the proposal, calling it “a risky and terrible idea.”

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

Finally, The Ethereum Merge now has a specific date.

Well… more or less.

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