USDC stablecoin company Circle launched a declaration to clarify its position after freezing all ETH addresses impacted by the U.S. Treasury Department‘s sanction against Tornado Cash.
In compliance with regulatory requirements following the ban, Circle had to activate a “blacklist function” to freeze the blacklisted accounts. By implication, all USDC funds held in the wallets cannot be transferred on-chain indefinitely.
Circle, however, said that activating the ‘blacklist function” went against the ethos of an open internet. It explained it had to make the move since complying with existing law to stop money laundering is both a right and an obligation.
Circle considers the compromise as a price digital issuers have to pay to remain compliant with existing laws in the US.
“Maintaining compliance with sanctions laws through block lists is a reality of issuing a digital asset within the regulatory perimeter of the U.S. and other countries.”
The stablecoin issuer is looking to work with policymakers and key industry players to find a level playground to abide by the existing laws without sacrificing individual privacy and freedom.
Reactions trailing Tornado Cash Sanction
For many crypto users, financial privacy is all important and the US Treasury’s restriction on Tornado is an infraction of their right.
CoinCenter previously launched a statement revealing issue over liberty infraction:
“All Americans who may wish to use this automated tool in order to protect their own privacy while transacting online who are having their liberty curtailed without the benefit of any due process.”
To restate its usage for personal privacy conservation, Ethereum Co-creator Vitalik Buterin in a tweet confessed to having actually utilized Tornado money to secure the personal privacy of the receivers of his contribution to Ukraine’s war efforts.
I’ll out myself as somebody who has actually utilized TC to contribute to this specific cause.
— vitalik.eth (@VitalikButerin) August 9, 2022
CommerceBlock’s personal privacy leader CEO Nicholas Gregory in a declaration to CryptoSlate, described that the restriction might do bit in combating cybercrime.
“The ban on Tornado Cash makes little sense, because in the end, no one can prevent people from using other mixer smart contracts, or forking the existing ones. It neither hinders cybercrime, nor privacy.”