Tornado Cash Ban in Response to Terra Crash and Contrary to Constitution

Not long ago, the crypto mixer became Tornado Cash banned in the United States. That means Americans are no longer allowed to use the controversial service. According to the CEO of crypto exchange Kraken, Jesse Powell, the hunt launched on crypto mixers like Tornado Cash is an overreaction to the demise of the Terra (LUNA) network.

Tornado Cash is banned

In a interview with Bloomberg Powell states that he believes the sanctions against Tornado Cash are a result of Terra’s demise. According to him, governments now want more transparency in the crypto industry and a crypto mixer such as Tornado Cash is of course an eyesore.

“The transparency people can judge for themselves what is really going on. This is primarily a reflexive reaction of sorts, a hasty reaction to what happened to UST and Luna recently. Regulators are overreacting to protect people.”

However, according to Powell, banning crypto mixers goes way too far. He compares the use of crypto mixers even with freedom of expression. For that reason, he also doubts whether banning Tornado Cash in the United States does not violate the US Constitution.

While Powell clearly disagrees with the measures against Tornado Cash, he admits that they at Kraken have no choice but to comply with these measures. Therefore, Kraken prohibits the withdrawal of funds to an account associated with Tornado Cash.

“We prohibit withdrawals to addresses associated with Tornado, and we probably freeze all funds coming from a Tornado address,”

Arrest in Amsterdam

Tornado Cash was recently launched not only in the United States. In the Netherlands, the FIOD opened a criminal investigation into the crypto mixer a while ago. Last week, in the context of this investigation, a developer of Tornado Cash was even banned by the FIOD arrested in Amsterdam.

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