In a move that raised the eyebrows of crypto privacy wonks, coin mixer Tornado Cash said Friday it is using a tool developed by compliance firm Chainalysis to block crypto wallets sanctioned by the U.S. Office of Foreign Assets Control (OFAC).
However, the blockade only applies to the user-facing decentralized application (dapp), not the underlying smart contract, one of the protocol’s founders later tweeted.
The coin mixer, which claims to defend people’s financial privacy, has often been used to obfuscate the trail of crypto obtained through hacks.
The protocol’s founder has previously said that it is “technically impossible” to enforce sanctions on decentralized protocols like Tornado Cash. “There’s not much we can do,” he said in a March interview.