OFAC Backtracks (Somewhat) on Tornado Cash Sanctions

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 12 November 2022

⏱️ 16 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by Nexo.io and Circle. On this edition of the “Weekly Recap,” NLW looks at some small but potentially significant shifts to the Office of Foreign Assets Control’s sanctions against Tornado Cash, the Securities and Exchange Commission’s victory over LBRY and more. - Nexo Pro allows you to trade on the spot and futures markets with a 50% discount on fees. You always get the best possible prices from all the available liquidity sources and can earn interest or borrow funds as you wait for your next trade. Get started today on pro.nexo.io. - Circle, the sole issuer of the trusted and reliable stablecoin USDC, is our sponsor for today’s show. USDC is a fast, cost-effective solution for global payments at internet speeds. Learn how businesses are taking advantage of these opportunities at Circle’s USDC Hub for Businesses. - “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with today’s editing by Eleanor Pahl and research by Scott Hill. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. Music behind our sponsors today is “War” by Enoch Yang. Image credit: Staff/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:09.2	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:15.3	The breakdown is sponsored by nexus.io and circle and produced and distributed by CoinDesk.
0:22.8	What's going on, guys? It is Saturday, November 12th, and that means it's time for the weekly recap.
0:28.5	Before we get into that, if you are enjoying the breakdown, please go subscribe to it, give it a rating,
0:32.2	give it a review, or if you want to dive deeper into the conversation, come join us on the
0:36.0	breakers discord. You can find a link
0:37.9	in the show notes or go to bit.ly slash breakdown pod. All right, guys, so again, sorry to disappoint,
0:43.7	but as of recording, this is Wednesday, November 9th. I still don't know anything. I still can't
0:49.1	say anything. So obviously, it's quite clear what the big story of the week is. But at the moment,
0:53.6	I must continue to remain quiet on that particular story.
0:57.7	That said, there were a few other important stories, things that would be covered this week
1:01.9	normally as the title for an entire show.
1:04.8	And so I wanted to use the weekly recap to do a couple of those stories.
1:08.6	First, one of the most significant tipping points in the regulatory
1:11.3	discussion this year happened when the Office of Foreign Asset Control or OFAC sanctioned Tornado
1:16.4	Cash. Tornado Cash is a mixing service that adds privacy to crypto transactions by making
1:21.5	it difficult to see inputs and outputs. The sanctions brought up some serious questions.
1:26.3	In fact, I would argue that they were one of the most
1:28.2	galvanizing actions the government has ever taken against crypto. One of the big questions was,
1:33.2	did OFAC actually have the authority to sanction a smart contract? This was completely new territory
1:39.1	and caught a lot of people off guard. We've seen sanctions in the past, but they've always been for
	...

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