The memo
REJECTED. Tornado Cash is privacy infrastructure, not an investment or yield venue, and directing ordinary advisory assets through it would create a disproportionate AML, source-of-funds, custody-note, and counterparty-screening burden with no compensating portfolio return. Treasury removed Tornado Cash sanctions in March 2025, so this is not a stale sanctions rejection. The live fact is narrower and stronger: DOJ obtained a 2025 conviction for knowingly operating an unlicensed money-transmission business that moved criminal proceeds, while immutable pools provide no counterparty screening.
What would reopen the file
- A client-specific privacy mandate is approved by counsel and compliance with documented lawful purpose and transaction-monitoring controls
- The custodian, banking, and tax-reporting counterparties confirm in writing that the proposed flow and compliance report are acceptable
- A proposed-size test preserves the withdrawal note and produces a complete source-of-funds report without an unapproved relayer
Facts on file
- Verdict
- Rejected
- Exposure
- other
- Chains examined
- Ethereum, BSC, Arbitrum, Gnosis, Polygon, Avalanche, OP Mainnet, Ethereum Classic
- Memo version
- v1
- Reviewed
- Next review