Web3 and the Tornado Cash challenge

Money launderers and other criminals are exploiting the weaknesses of the financial system. A new approach to building digital financial infrastructure that protects individual privacy without undermining security needs is needed.

Cryptocurrencies like Bitcoin and Ethereum provide full transparency into transactions through public records. PHOTO: REUTERS
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The United States Department of the Treasury's Office of Foreign Assets Control recently sanctioned a technology called Tornado Cash, on the grounds that it "has been used to launder more than US$7 billion (S$9.8 billion) worth of virtual currency since its creation in 2019".

Such enforcement measures are nothing new. But what makes this case unique is that Tornado Cash is a piece of open-source software.

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