Powell joined the chorus calling the Tornado ban unconstitutional, adding that it was a knee-jerk response to Terra’s collapse. Jesse Powell, Kraken’s CEO, denounced the U.S. government’s ban crypto transaction privacy tool Tornado Cash for being “unconstitutional.”
On Tuesday, he spoke to and stated that people have a right of financial privacy. He also said that he does not believe that the sanctions will be challenged in court.
On August 8, the U.S. Treasury Department stated that the measures were taken because criminals used the privacy mixer to “launder more than 7 billion worth virtual currency since its inception in 2019”.
Indeed, $7Billion is the approximate amount of funds that have been transferred through the privacy tool. But, according to Elliptic blockchain sleuths, only $1.5B of this sum was actually ill-gotten.
Powell said that the ban was “mostly a knee-jerk response to the Terra ecosystem’s collapse back at May” and that the removal of Tornado’s source code from Github where it was originally stored “wasn’t necessary.”
A representative confirmed that Github had removed the code last week, but said that the “smart contract are on the Ethereum Blockchain.” It doesn’t affect Tornado Cash contracts.
Powell joins an extensive list of crypto advocates that have condemned the sanctions.
Hayden Adams, inventor of Uniswap, stressed his belief that legal privacy tools are necessary. Adams called the sanctions “freedom-of-speech issue” echoing many industry leaders who referenced the 1996 Federal court case Bernstein v U.S., which established “source code is speech” under the First Amendment.
The sanctions talks came to an abrupt halt last Friday when a Dutch police officer arrested a ” suspected Tornado” developer in Amsterdam.
The charges against the 29-year old included “involvement with concealing criminal financial flows and facilitation of money laundering through the mixing cryptocurrencies through Tornado Cash, a decentralized Ethereum mixing site.”
Numerous crypto advocacy groups also opposed the U.S. Treasury Department Tornado Cash ban.
According to the Electronic Frontier Foundation, there are “clear First Amendment implications whenever government prohibits publication of computer code at a public site.”
Coin Center said that OFAC had outgrown its boundaries and “potentially violates constitutional right to due process and freedom of speech.”