Kraken CEO Jesse Powell said that the US government’s decision to penalize Tornado Cash leaves cryptocurrency exchanges with no choice but to ban funds from the coin-mixing service.
Earlier this month, the US Treasury banned Americans from using Tornado Cash, citing national security concerns, as the agency claims the protocol has been used to launder $7 billion worth of crypto assets since 2019.
In a new interview with Bloomberg, the head of the crypto exchange said that there are still many people using Tornado Cash for legitimate reasons but that in compliance with the government’s order, Kraken will have to freeze funds that come from the crypto cup.
“We will block withdrawals to all addresses associated with Tornado, and potentially freeze all funds from our Tornado address.”
Powell says the Tornado Cash case will likely be challenged over its validity.
“I think we’re going to see a constitutional challenge against Tornado Cash, and I hope people get their right to a zip code and that code turns out to be talk and money turns into talk and everyone has a right to spend their money however they want to.”
The CEO of Kraken also shares their thoughts on the restrictions the government is placing on cryptocurrencies.
“It’s a tough challenge now. That’s why we have these conversations all the time. We’re really trying to educate regulators, law enforcement and legislators about the real risks here and the real need for financial privacy and who cryptocurrency really serves.
Beyond that, this speculative use case here in the US, it really helps people around the world who have less access to financial services. There are billions of people around the world who don’t have access to a bank account, so encryption is really for those people first and foremost.
Bypassing government controls around the monetary system is the kind of side benefit you see playing in cases like Canada where they closed protesters’ bank accounts. It’s the kind of scary thing that we hope you won’t see here in the States, but it’s a different kind of insurance policy that Cryptocurrency and bitcoin are specifically offered.
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