The United States Treasury announced Friday that it has delisted Ethereum coin mixing service Tornado Cash from its list of parties sanctioned by the Office of Foreign Assets Control, or OFAC, reversing course after first blacklisting the service in 2022.

“Based on the Administration’s review of the novel legal and policy issues raised by use of financial sanctions against financial and commercial activity occurring within evolving technology and legal environments, we have exercised our discretion to remove the economic sanctions against Tornado Cash as reflected in Treasury’s Monday filing in Van Loon v. Department of the Treasury,” the Treasury said Friday.

But the Treasury Department is actually tardy in its sanctions reversal.

In November, a fifth circuit judge ruled that the Treasury Dept. had overstepped its authority by targeting Tornado Cash’s smart contracts. The judge wrote that autonomous software cannot be classified as property and therefore cannot be sanctioned.

After the judge’s ruling, Department of Justice prosecutors asked that the Treasury be granted a 60-day delay. That pushed OFAC’s deadline to March 17.

Coinbase backed the lawsuit, arguing that the sanctioning of Tornado Cash was unjust. And Paul Grewal, the crypto exchange’s chief legal officer, has had a lot to say about the delays.

There’s also a pending money laundering trial against Tornado Cash co-founder Roman Storm, who was arrested in 2023. In November, after the ruling that the Tornado Cash sanctions were an overreach, a U.S. district court judge struck down Storm’s motion to have his case dismissed.

The Treasury Dept. initially sanctioned Tornado Cash in August 2022, saying in a statement at the time that it had been used “to launder more than $7 billion worth of virtual currency since its creation in 2019.”

In Friday’s statement, the Treasury said that it continues to be concerned about money laundering, particularly from North Korea—whose malicious hacking groups have stolen billions from various crypto protocols and companies. But the department is trying to balance maintaining vigilance without stamping out innovation in the process.

“Digital assets present enormous opportunities for innovation and value creation for the American people,” said Secretary of the Treasury Scott Bessent, in a statement. “Securing the digital asset industry from abuse by North Korea and other illicit actors is essential to establishing U.S. leadership and ensuring that the American people can benefit from financial innovation and inclusion.”

It’s worth noting that despite the U.S. sanctions and lawsuits, Tornado Cash was never actually disabled—much to the chagrin of lawamkers. In fact, Ethereum co-founder Vitalik Buterin very publicly declared that he had used it to privately make donations to support Ukraine in its war with Russia.

Editor’s note: This story was updated after publication with additional detail.

Edited by Andrew Hayward

President Donald Trump vowed to make America the “undisputed Bitcoin superpower and crypto capital of the world,” during video remarks delivered to the Digital Asset Summit conference in New York Thursday.

It was only last night that Blockworks, the conference organizer, announced Trump would address attendees at its Digital Asset Summit in New York on Thursday morning. The 3-minute long address marks the first time ever that a sitting president would address a crypto industry conference.

Although the President didn’t announce any new initiatives, he reiterated that he’s called on Congress to pass “landmark legislation creating simple, common sense rules for stablecoins.”

With it, he said, “institutions large and small will be liberated to innovate and take part in one of the most exciting technological revolutions in modern history.”

Just last week, the Senate voted to pass the Genius Act out of committee with strong bipartisan support. The bill’s sponsors, including Sen. Bill Hagerty (R-TN), have said they intend for the GENIUS Act to receive a full vote on the Senate floor by the end of next month.

If the bill passes, it would create provisions addressing reserve requirements, audits, transparency, and licensing for stablecoin issuers.

Echoes of Nashville Bitcoin conference

During his unprecedented in-person appearance at the Bitcoin 2024 conference in Nashville, while he was still campaigning for reelection, Trump urged attendees to “never sell your Bitcoin.” That speech was also the first time that the President alluded to keeping the Bitcoin that had already been seized by the government.

“As the final part of my plan today, I am announcing that if I am elected, it will be the policy of my administration, the United States of America, to keep 100% of all the Bitcoin the U.S. government currently holds or acquires into the future,” Trump said at the time.

So far, President Trump seems intent on making good on his campaign promise.

On March 6, he signed an executive order to create the U.S. Strategic Bitcoin Reserve. But the investors were disappointed to see that he was initially sticking to his plan to keep Bitcoin the government had seized or confiscated in connection to crimes rather than use a portion of its budget to buy BTC.

But there are efforts underway to see that it does. Sen. Cynthia Lummis (R-WY) introduced her BITCOIN Act in the Senate last week. If passed, it would allow the government to acquire up to $80 billion worth of Bitcoin.

Just days later, Rep. Byron Donalds (R-FL) introduced legislation in the House of Representatives that would enshrine into law the President’s proposed Strategic Bitcoin Reserve. But the bill is crucially different from the legislation Lummis introduced in the Senate.

While Lummis’ bill specifies how much more Bitcoin the government could add to its reserve, Donalds’ bill would authorize the U.S. Treasury Secretary and Commerce Secretary to add an unspecified amount of Bitcoin to a federal reserve if such acquisitions were “budget neutral,” Donalds told Decrypt in a statement.

It’s worth mentioning his draft of the bill contains no such provision.

Edited by James Rubin.

Crypto exchange OKX has temporarily halted its decentralized exchange (DEX) aggregator in response to security concerns and recent “attacks” targeting its platform. 

The exchange announced the pause on Sunday, citing the need to address incomplete blockchain tagging and implement new security features to prevent misuse by malicious actors. 

Blockchain tagging refers to the process of labeling transactions on a blockchain to accurately identify and track them on explorers.

“We detected a coordinated effort by Lazarus group to misuse our defi services,” the company said. “At the same time, we’ve noticed an increase in competitive attacks aiming to undermine our work.”

The move comes amidst scrutiny of OKX’s role in the alleged laundering of $100 million from the Bybit hack. OKX did not immediately respond to Decrypt’s request for comment.

In January, Bybit, one of the largest crypto exchanges, suffered a devastating hack in which nearly $1.5 billion in Ethereum (ETH) and ETH-related tokens were stolen, making it the largest hack in crypto history. 

The hack was attributed to the Lazarus Group, a notorious North Korean hacking collective believed to be responsible for a string of high-profile cybercrimes.

Bybit CEO Ben Zhou recently pointed out that nearly $100 million, or 40,233 ETH, from the $1.5 billion hack had flowed through OKX’s Web3 platform, with a significant portion of the funds now lost and untraceable.

In a related development, Bloomberg reported on March 11 that regulators in the European Union are reportedly investigating OKX’s decentralized finance (DeFi) platform, questioning whether the exchange’s Web3 service is compliant with the EU’s Markets in Crypto-Assets (MiCA) regulation.

The report, citing people familiar with the matter, said the exchange’s Web3 service, which includes its wallet platform, may be used for illicit activities, prompting discussions among EU regulators about potential penalties.

OKX denied the allegations, refuting the claim that it is under investigation by European regulators and calling the report “misleading.”

“We urge our community to see these attacks for what they really are – deliberate attempts to mischaracterize our role and the value we bring to the ecosystem,” OKX said in the Sunday statement. 

Haider Rafique, the company’s global CMO, called the accusations “preposterous,” saying OKX had implemented measures to prevent the misuse of its services. 

“We did the exact opposite,” Rafique noted. “We froze funds moving to our CEX and launched new features to detect/block hackers’ addresses from using our DEX or wallet services.” 

In light of the situation, OKX confirmed it had consulted with regulators and made the decision to pause its DEX aggregator services proactively.

OKX’s recent troubles are compounded by a settlement with the U.S. Department of Justice (DOJ). 

Last month, OKX’s affiliate, Aux Cayes FinTech Co. Ltd, agreed to pay over $500 million in penalties after pleading guilty to operating without a money transmitter license and failing to follow anti-money laundering laws. 

The settlement stems from accusations that OKX facilitated illicit transactions, with the DOJ stating that OKX violated U.S. laws by actively seeking American customers.

Edited by Sebastian Sinclair