Tornado Cash
Crypto Overview
Overview
Tornado Cash is a privacy-focused cryptocurrency protocol that enables private transactions on the Ethereum blockchain. TORN is its governance token, allowing holders to vote on protocol changes and upgrades.
Purpose and Utility
The primary purpose of Tornado Cash is to provide transaction privacy by breaking the on-chain link between source and destination addresses. The TORN token's utility is centered around governance rights and protocol operation.
Current Status
It's important to note that in August 2022, the U.S. Treasury's Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, citing its use in illicit activities. The protocol's frontend website and many related services were subsequently shut down, though the smart contracts remain on the Ethereum blockchain due to their immutable nature.
Business Model Analysis
The protocol operates through smart contracts that mix cryptocurrency deposits with others to obscure their origin. While privacy tools themselves are not inherently haram, there are significant concerns about the protocol's primary use cases facilitating illicit activities.
Development and Adoption
Due to the sanctions, active development has largely ceased, and legitimate adoption has significantly decreased. The protocol's primary current usage appears to be predominantly associated with activities that aim to obscure transaction sources.
Crypto Impact
To assign a comfort level investing in Tornado Cash from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to Tornado Cash.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.