Learn · privacy
Tornado Cash explained: the mixer and the legal saga
Updated 15 October 2026 · Reviewed for CryptosBeginner
A piece of open-source code became the center of a global fight over whether software itself can be sanctioned. Here is how the mixer works and what the courts decided.
Important: this page is a factual overview for education. It is not legal advice, and it does not tell you how to use mixers. Laws differ by country and keep changing. Talk to a qualified attorney if you need legal guidance.
Alex Rivera · Crypto researcher, CryptosBeginner
Every review is research-led: specs, fees, and availability are checked against official sources before publication and re-checked on every update. Affiliate links never influence verdicts. Last reviewed 15 October 2026.
What Tornado Cash is
Tornado Cash is a set of smart contracts on Ethereum that mix cryptocurrency to break the on-chain link between sender and receiver. You deposit ETH or tokens into a pool, wait, then withdraw to a fresh address. Because many users' funds sit in the same pool, an outside observer cannot connect your withdrawal to your deposit.
The key technical detail: it uses zero-knowledge proofs. When you withdraw, you prove you made a valid deposit without revealing which one was yours. The contracts are non-custodial (nobody holds your funds but the code) and, crucially, immutable: once deployed, even the developers could not change or shut them down. That immutability became the center of the legal battle.
How a mixer works, step by step
The mixer model: deposits pool together, then withdrawals go to fresh addresses. The cryptographic proof confirms validity without revealing which deposit matches which withdrawal.
Note the weakness: the privacy depends on the crowd. If only three people ever use a pool, matching deposits to withdrawals is trivial. Large, busy pools with long waiting times offer far stronger privacy than small, quiet ones. Timing analysis and distinctive amounts can also leak information, which is why serious users deposit standard denominations and wait.
The legal saga: what happened
This is the part that made Tornado Cash famous far beyond crypto. Here is the factual timeline.
August 2022
OFAC sanctions Tornado Cash
The US Treasury's sanctions office places Tornado Cash on its sanctions list, arguing North Korean hackers laundered stolen funds through it. For the first time, the target is autonomous code rather than people or companies.
2022 to 2023
Developers arrested
Alexey Pertsev is arrested in the Netherlands. Roman Storm and Roman Semenov are charged in the US. The crypto industry erupts over whether writing open-source code can be a crime.
May 2024
Pertsev convicted
A Dutch court sentences Pertsev to 64 months for money laundering, ruling that building the tool with knowledge of its criminal use was enough.
November 2024
US appeals court vacates the sanctions
The Fifth Circuit rules that OFAC overstepped: immutable smart contracts are not property of a sanctioned person and cannot be sanctioned. A landmark decision for code as speech.
2025
Treasury drops the sanctions
Rather than fight the ruling, the Treasury removes Tornado Cash from the sanctions list and abandons its appeal. Related lawsuits are dismissed. The protocol itself is legally clear in the US.
August 2025
Storm convicted on one count
A New York jury convicts Roman Storm of conspiring to operate an unlicensed money-transmitting business but deadlocks on the more serious money laundering and sanctions conspiracy charges.
October 2026
FinCEN withdraws mixer rules
US regulators quietly drop a 2023 proposal that would have imposed new reporting requirements on crypto mixers, a further softening of the official stance.
April 2027 (scheduled)
Storm retrial
A retrial on the deadlocked money laundering and sanctions conspiracy counts is scheduled, unless the judge grants Storm's pending acquittal motion first.
The split outcome is the honest summary: the code won in court, but the developers are still fighting criminal cases. Writing privacy software is not clearly illegal in the US, but it is clearly not safe either.
What came after: compliance-oriented privacy
The Tornado Cash saga pushed builders toward a middle path: privacy for users, with built-in safeguards against illicit use. Railgun screens deposits against sanctions lists while keeping transactions private, and has processed billions in volume. Privacy Pools lets users cryptographically prove their funds are clean without revealing their identity. The Ethereum Foundation itself is funding privacy research that includes both compliance-friendly and anonymity-preserving tools.
Whether regulators accept this compromise will shape the next decade of financial privacy. For the broader landscape, see our privacy coins hub and our comparison of Monero and Zcash.
Frequently asked questions
Is Tornado Cash still sanctioned?+
No. After the Fifth Circuit ruled in November 2024 that OFAC had overstepped by sanctioning immutable smart contracts, the Treasury removed Tornado Cash from the sanctions list in 2025 and abandoned its appeal. The protocol itself is no longer sanctioned, though criminal cases against individual developers continue separately.
What happened to the Tornado Cash developers?+
Alexey Pertsev was convicted in the Netherlands in May 2024 and sentenced to 64 months for money laundering. Roman Storm was convicted in New York in August 2025 on one count of conspiring to operate an unlicensed money-transmitting business; the jury deadlocked on money laundering and sanctions conspiracy charges, with a retrial scheduled. A third co-founder, Roman Semenov, was charged but remains at large as of our last check.
Does using a mixer make me a criminal?+
Using privacy software is not automatically illegal, but context matters enormously: using a mixer to launder stolen funds or evade sanctions is a crime, and prosecutors have argued that operating or promoting mixers can constitute money transmission offenses. Laws vary by country and are still evolving. This is general information, not legal advice. If you are unsure, consult a qualified attorney.
How is Tornado Cash different from Monero?+
Monero builds privacy into the currency itself: every transaction is private by default. Tornado Cash is a separate smart-contract tool on Ethereum that breaks the link between a deposit and a later withdrawal. Monero protects the whole network; Tornado Cash only protects users who actively use it, and only for the funds they route through it.
Are there legal alternatives to Tornado Cash?+
Yes, newer protocols have tried to build privacy with compliance features from the start. Railgun screens deposits against sanctions lists while keeping transactions private. Privacy Pools (0xbow) lets users prove their funds are not from illicit sources. These compliance-oriented designs are an attempt to offer privacy without repeating Tornado Cash's legal history.