Tornado Cash

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Tornado Cash: a simple explainer

What it is
Tornado Cash is an open-source, non-custodial service that hides where cryptocurrency comes from. It runs on Ethereum-compatible networks and uses advanced cryptography to mix funds so that the path from sender to receiver is hard to trace. It was designed as a privacy tool for transactions on public blockchains.

How it works
- You deposit Ethereum or ERC-20 tokens into Tornado Cash’s smart contracts.
- Later you withdraw to a different address using cryptographic proofs. This proves the withdrawal happened without linking it to the original deposit.
- The system uses zero-knowledge proofs (zk-SNARKs) to keep deposits and withdrawals unlinkable.

Governance and tech details
- Tornado Cash is governed as a decentralized autonomous organization (DAO). Decisions are made with a token called TORN that holders can use to vote on protocol changes.
- It is built with Solidity and operates on the Ethereum Virtual Machine, with open-source licenses and a public website (tornado-app.cash).

History and major events
- Created in 2019 by developers including Roman Semenov, Alexey Pertsev, and Roman Storm.
- In August 2022, U.S. authorities sanctioned Tornado Cash, saying it had laundered billions of dollars in cryptocurrency. The domain and GitHub were taken down, and one of the developers was arrested.
- The same period saw other actions, such as Circle freezing USDC tied to Tornado Cash, and various investigations into the platform’s role in money laundering.
- In August 2023, two more Tornado Cash developers were charged, and in May 2024, Pertsev was sentenced by a Dutch court to prison for money-laundering-related conduct.
- There were also legal debates about whether the software itself can be sanctioned or treated as speech, with privacy and freedom-of-speech concerns raised by groups like the Electronic Frontier Foundation.
- In 2023, a hacker briefly took control of parts of Tornado Cash’s DAO via a fraudulent proposal, then briefly relinquished control after laundering some funds.
- In late 2024 and early 2025, court actions and sanctions evolved, including discussions about whether the sanctions were lawful or should be lifted.
- In March 2025, U.S. authorities announced the lifting of sanctions on Tornado Cash and stated they would monitor for suspicious activity, signaling a change in how the government treats the protocol.

Current status and takeaway
- Tornado Cash has faced significant legal and regulatory scrutiny because it can be used for illicit activity, even though it also serves privacy goals for legitimate users.
- The DAO and privacy tech remain at the center of ongoing debates about crypto privacy, regulation, and law enforcement.
- Users should be aware of the legal landscape in their country before using privacy-focused tools like Tornado Cash.

Key terms
- DAO: Decentralized autonomous organization, a community-governed project.
- zk-SNARKs: A cryptographic method used to prove things are true without revealing details.
- ETH and ERC-20: Types of cryptocurrency on Ethereum-compatible networks.
- TORN: The token used for voting on Tornado Cash’s governance.