Kraken CEO criticizes Tornado Cash sanctions
Important takeaways
- Kraken CEO Jesse Powell has criticized sanctions imposed on Tornado Cash by the US Treasury Department and OFAC.
- On Bloomberg TV, he suggested that Tornado Cash has legitimate uses and that users have a right to privacy.
- Powell confirmed that Kraken will block transactions related to Tornado Cash addresses despite his objections.
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Kraken CEO Jesse Powell has protested recent US sanctions against addresses linked to coin mixer Tornado Cash.
Kraken leader defends Tornado Cash
Jesse Powell has criticized the sanctions against Tornado Cash.
Powell argued in an interview with Bloomberg Television today that individuals “have a right to financial privacy” and said many people use Tornado Cash for legitimate reasons.
He also questioned whether the sanctions would survive a constitutional challenge, citing Coin Center’s plan to take Treasury and OFAC to court over free speech.
However, Powell believes that the community response may be exaggerated. He said that while the removal of Tornado Cash’s GitHub code was unnecessary, he does not see these incidents as a sign of a broader attack on open source projects.
Rather, he suggested the sanctions were a “knee-jerk” and “rushed reaction” to TerraUSD’s collapse, adding that regulators overreacted with the intention of protecting the public.
Powell also confirmed that despite his objections, Kraken will block transactions to and from addresses related to Tornado Cash addresses. “We will ban withdrawals to addresses linked to Tornado, and we will likely freeze any funds coming in from a Tornado address,” Powell told Bloomberg.
Powell’s opposition to sanctions is expected given his past opposition to excessive regulation. In February, he criticized emergency measures by the Canadian government that targeted crypto exchanges. That same month, he refused to freeze Russian accounts at the request of Ukrainian Deputy Prime Minister Mykhailo Fedorov.
Powell is not the only crypto leader to criticize sanctions against Tornado Cash. Coinbase CEO Brian Armstrong and Circle CEO Jeremy Allaire have also criticized the sanctions on the grounds that they target a utility rather than a person or entity.
The US Treasury Department first imposed sanctions on Tornado Cash addresses on August 8. One developer, Alexey Pertsev, was arrested by Dutch authorities in the Netherlands on August 12.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH and other cryptocurrencies
