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U.S. Treasury Lifts Tornado Cash Sanctions While Maintaining DPRK-Laundering Concerns

Treasury removed economic sanctions against Tornado Cash in March 2025 after reviewing legal and policy issues, but said it remained concerned about DPRK-linked cybercrime and laundering.
From TheFinanceBase Team4 min to read
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On March 21, 2025, the U.S. Treasury Department said it had removed economic sanctions against Tornado Cash after reviewing legal and policy questions. The announcement did not say that a newly opened North Korea money-laundering probe prompted the removal. Treasury instead reiterated its concern about North Korean state-sponsored hacking and laundering, said it would continue monitoring risky transactions, and advised U.S. persons to exercise caution.

What Treasury’s March 2025 decision means

Treasury said it used its discretion to remove economic sanctions against Tornado Cash after considering issues raised by applying financial sanctions to activity in evolving technological and legal environments. The department said the removal was reflected in its Monday filing in Van Loon v. Department of the Treasury. The March 21 announcement describes a legal and policy review; it does not identify a new North Korea investigation as the reason for the decision. Treasury’s delisting announcement

The removal is distinct from Treasury’s view of illicit-finance risks. The department said it remained deeply concerned about DPRK state-sponsored hacking and laundering, would keep monitoring transactions that might benefit malicious cyber actors or the DPRK, and urged U.S. persons to use caution with transactions presenting those risks. That warning is not individualized legal advice.

What a mixer is—and what the sanctions did not establish

Treasury described Tornado Cash as a virtual-currency mixing service operating through smart contracts, primarily on Ethereum. A mixer is intended to make the source or movement of funds harder to trace by combining or routing transactions. That function does not, by itself, establish that every user or transaction is illicit. In its August 2022 announcement, Treasury said most virtual-currency activity was licit while alleging that Tornado Cash had been used to launder criminal proceeds. Treasury’s August 2022 designation announcement Treasury’s November 2022 redesignation announcement

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Those statements are Treasury’s explanations and allegations about its sanctions actions, not findings by a court. The March 2025 announcement reports the department’s decision and its continuing policy concern; it does not adjudicate the conduct of individual users.

How the Tornado Cash actions unfolded

Date Government action and stated basis DPRK-related context in Treasury’s account
August 8, 2022 Treasury announced sanctions against Tornado Cash. It said the service had been used to launder more than $7 billion in virtual currency since its creation in 2019. The department also cited more than $455 million stolen by Lazarus Group, more than $96 million from the June 24, 2022 Harmony Bridge heist, and at least $7.8 million from the August 2, 2022 Nomad heist. These are Treasury’s figures and characterization, not independently stated court findings in the release. Source: Treasury, August 8, 2022 Treasury included funds it attributed to Lazarus Group, which it described as North Korean state-sponsored. It also said it would pursue mixers used to launder virtual currency for criminals and those assisting them.
November 8, 2022 OFAC delisted and simultaneously redesignated Tornado Cash under Executive Orders 13722 and 13694, as amended. Treasury said the new action replaced the August designation. Source: Treasury, November 8, 2022 The action was part of Treasury’s stated response to illicit cyber activity and DPRK-related threats. Delisting and redesignation were a change in the basis for the sanctions action, not the March 2025 removal.
August 23, 2023 Treasury announced sanctions against Tornado Cash co-founder Roman Semenov and described allegations concerning the service’s use to launder stolen virtual assets. This was a separate action from the later removal of sanctions against the service. Source: Treasury, August 23, 2023 Treasury alleged Tornado Cash had been used to launder stolen virtual assets for North Korea. The release’s allegations should not be treated as judicial findings.
March 21, 2025 Treasury said it removed economic sanctions against Tornado Cash after reviewing legal and policy issues associated with sanctions in evolving technological and legal environments. Source: Treasury, March 21, 2025 Treasury maintained its concern about DPRK-linked hacking and laundering and advised caution; it did not say a new probe caused the removal.
November 4, 2025 Treasury announced sanctions against eight individuals and two entities for roles in laundering funds connected to DPRK schemes, including cybercrime and IT-worker fraud. Source: Treasury, November 4, 2025 This later action supplies broader context about Treasury’s continuing focus on DPRK-linked laundering. The release does not connect it specifically to Tornado Cash or say it caused the March delisting.

Why sanctions removal and continued warnings can coexist

The two messages address different questions. Treasury’s removal concerned whether it would maintain this particular economic-sanctions action after reviewing legal and policy issues. Its warnings addressed the broader risk of transactions benefiting malicious cyber actors or North Korea. Removing sanctions against Tornado Cash did not amount to a declaration that DPRK-linked laundering risks had ended, nor did Treasury say that all related conduct or actors were cleared.

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In the March release, Treasury Secretary Scott Bessent said, “Securing the digital asset industry from abuse by North Korea and other illicit actors is essential to establishing U.S. leadership and ensuring that the American people can benefit from financial innovation and inclusion.” The quotation captures the department’s stated balance between financial innovation and guarding against abuse. Treasury, March 21, 2025

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What the announcement does—and does not—say about a probe

The headline’s phrase “amid North Korea money laundering probe” should not be read as a confirmed explanation for the delisting. Treasury’s March 21, 2025 release says the department remained concerned about DPRK activity and would continue monitoring risky transactions; it does not announce a newly opened probe tied to Tornado Cash or say an investigation prompted the sanctions removal.

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The separate November 4, 2025 sanctions announcement concerns DPRK-linked laundering schemes, including cybercrime and IT-worker fraud. It does not establish a Tornado Cash connection. Treasury’s releases provide the agency’s statements about its actions; the current procedural status of Van Loon v. Department of the Treasury is not established by those announcements.

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