Buterin, Armstrong, Aoki Targeted in Tornado Cash ETH Dusting Spree

Someone has been using Tornado Cash to withdraw ETH into the wallets of several high-profile crypto personalities following yesterday’s sanctions by the U.S. Treasury. The implications of the stunt are far from clear, but they could be intense and wide-ranging.

“You Can’t Hide”

A rogue Tornado Cash user is using the fallout from the U.S. Treasury sanctions against the cryptocurrency mixer to cause a little chaos.

Since the U.S. Treasury Department formally issued sanctions against the popular Ethereum mixer yesterday, one user behind an Ethereum address commencing 0x12d6 has been using the protocol to send 0.1 ETH to multiple wallets belonging to notable cryptocurrency users. Of the many addresses that received ETH via the dusting were wallets belonging to Vitalik Buterin, Brian Armstrong, Jimmy Fallon, Ryan Sean Adams, Anthony Sassano, Steve Aoki, Cozomo de’ Medici, Logan Paul, Beeple, Shaquille O’Neal’s “Shaq Gives Back” NFT project, and the Ukraine Crypto Donation Fund.

Though the assailant is unknown, the stunt may be the work of Twitter user depression BTC (@depression2019), who said yesterday afternoon that they had “been accumulating a pretty big list” of prominent Crypto Twitter users’ ETH addresses and Ethereum Name Service domain names and planned to withdraw ETH from Tornado Cash to an unspecified number of them.

Been accumulating a pretty big list of major CT users ETH addresses and their .ens official addresses

Withdrawing .1 ETH to all of them from tornado throughout the rest of the day

— depression BTC (@depression2019) August 8, 2022

The user then said they would initially target ENS names before ominously warning their ENS users that “you can run but you can’t hide.”

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), which enforces economic and trade sanctions based on U.S. foreign policy, added Tornado Cash and its associated addresses to its list of sanctioned entities yesterday. The sanctions prohibit U.S. persons from economically engaging with such entities in any way. According to guidance from the Treasury’s website, “U.S. persons and persons otherwise subject to OFAC jurisdiction, including firms that facilitate or engage in online commerce or process transactions using digital currency, are responsible for ensuring that they do not engage in unauthorized transactions prohibited by OFAC sanctions, such as dealings with blocked persons or property, or engaging in prohibited trade or investment-related transactions.”

The antics of the Ethereum user behind the stunt appear to be in flagrant violation of U.S. sanctions, but there is the more difficult question of whether or not the dusting implicates the receiving wallets for having violated sanctions as well. According to the same guidelines, a U.S. person who holds “blocked” currency “must deny all parties access to that virtual currency, ensure that they comply with OFAC regulations related to the holding and reporting of blocked assets, and implement controls that align with a risk-based approach.” Furthermore, holders of blocked assets have 10 days to report the funds to OFAC. This suggests those who received the ETH are responsible for freezing the funds and reporting them to OFAC.

Several major crypto entities have complied with the Treasury’s sanctions since the announcement, with Circle freezing USDC held in Tornado Cash and GitHub deleting the accounts of multiple Tornado Cash developers. Node infrastructure providers Alchemy and Infura have also now blocked access to the protocol. The development has been met with harsh criticism from the crypto community, with concerns over privacy and censorship resistance at the forefront.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.