Tornado Cash

The news headline of the web3/crypto world of the last few days has been focused on Tornado Cash which is a crypto token that has been blacklisted by the US Treasury Department.

Tornado Cash is not just an ordinary crypto token. It’s a token that is purposely designed to protect the privacy of those who send and receive the tokens.

Of course, there’s many great use cases of this. In a world where governments and companies are tracking your everyday movements easily, privacy has become a huge factor. Perhaps someone wanted to donate money to Ukraine without fear of the recipient being targeted. Or maybe there’s a large movement of money between accounts, and the recipient or sender is worried about hackers.

The other side of the equation is that Tornado Cash could be used to launder money and for other illicit activities. In this case, the US Treasury Department cited that North Korean hackers used the tokens to move money around. That is the major problem.

Tornado Cash is the latest incident in the ongoing debate of privacy versus regulation. Like most good things in life, bad actors ruin all the fun for the good guys.

I don’t know how this problem is solved. I would love to meet some entrepreneurs who have a good idea though.