With help from Mohar Chatterjee
The U.S. Treasury’s recent sanctions of Tornado Cash are opening important new fronts in the ever-evolving arms race between government regulators and the digital innovators trying to build a new world without them.
This week: Can an open-source piece of code really be deplatformed?
Cryptocurrency, and much of the open internet, is based on the idea that computer code is a shared public resource that can live more or less forever online. Bitcoin, to take the best-known example, is nothing but a bunch of servers running the same protocol and tracking the same list of transactions.
Tornado Cash, as most of the crypto world knows by now, is a “mixer,” a piece of software that obscures the origin of cryptocurrency. Worried about its use for money laundering, the Treasury Department has been trying to bar people from using it, including by sanctioning Tornado Cash itself.
The issue is that Tornado isn’t a person, a country or a company, the typical subjects of Treasury’s blacklists. As we addressed here in the wake of sanctions, it’s a self-executing piece of software, something without an owner, a legal residence or a bank account. It might even en