A new study from the New York Federal Reserve found that the US government’s sanctions against cryptocurrency mixing service Tornado Cash were somewhat effective, but cooperation was ultimately “mixed.” 

The US Department of Treasury’s Office of Foreign Assets Control (OFAC) blocked Tornado Cash in August 2022, marking the first time the US government sanctioned a non-custodial smart contract. 

Tornado Cash transactions, both by volume and value, instantly fell after the sanctions were announced, the NY Fed found. User diversity, which researchers measured by the number of unique addresses, also “dropped significantly” in the weeks after Tornado Cash was blocked. 

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