🎙 Jake Chervinsky on Tornado Cash Sanctions: The Rightful Outrage and the Need to Further Decentralize DeFi
This week on The Defiant Podcast we speak to Jake Chervinsky, the executive vice president and head of policy at Blockchain Association, a non-profit trade association representing the crypto industry in Washington DC. Jake is one of the most qualified to discuss the US Treasury Department sanctioning Tornado Cash, a development that’s caused shockwaves through crypto.
We talk about what these actions are, who is at risk and what is the significance of it all. Tornado Cash got sacntioned because it was used to launder funds, specifically by North Korea’s Lazarus Group. Still, Chainalysis found that 23% of all activity was linked to illicit funds — a large percentage but also not the predominant use of the platform. We discuss all the legitimate reasons why individuals may want to use a mixer.
There is an indication that these sanctions go against not just the right to privacy, but potentially also free speech, as an Amsterdam-based Tornado Cash developer recently being arrested for, what looks like, just writing code. Jake provides context to this arrest and on whether constitutional rights were infringed with these sanctions.
The ramifications have been quick and widespread. DeFi users have found themselves locked out of their Tornado Cash accounts while many dApps have blacklisted all wallets with any prior contact to the Tornado Cash smart contract. Jake discusses what the alternatives are for developers and users in DeFi, and what the next steps are.
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