According to @Flavio_leMec, the legality of on-chain privacy is in focus for builders and traders alike, raising immediate compliance and liquidity questions for privacy tools and tokens, including ZEC and XMR, and for exchanges serving U.S., EU, and UK users, source: @Flavio_leMec tweet on Nov 20, 2025. In the U.S., the Treasury’s OFAC sanctioned Tornado Cash, making interactions with listed mixer addresses sanctionable for U.S. persons and heightening compliance risk for platforms, source: U.S. Treasury OFAC press release, Aug 8, 2022. The U.S. Department of Justice charged Tornado Cash founders with money laundering and sanctions violations, signaling criminal exposure for facilitation of illicit flows, source: U.S. Department of Justice press release, Aug 23, 2023. In the EU, the Transfer of Funds Regulation extends the Travel Rule to crypto-asset service providers, requiring originator and beneficiary data on transfers and pressuring venues to restrict assets and tools that cannot support compliance, source: European Parliament press release on tracing crypto transfers, April 20, 2023. In the UK, the FCA Travel Rule statement requires firms to collect and share beneficiary and originator data when sending or receiving crypto, similarly constraining privacy coins without selective disclosure, source: UK Financial Conduct Authority statement, Aug 17, 2023. FinCEN proposed designating convertible virtual currency mixing as a primary money laundering concern, increasing bank and exchange scrutiny on privacy tooling and flows, source: U.S. FinCEN notice of proposed rulemaking, Oct 19, 2023. Compliance-compatible privacy exists: Zcash supports viewing keys and selective disclosure that enable audits and reporting without public data leakage, which reduces delisting risk versus opaque mixers, source: Electric Coin Company Zcash documentation on viewing keys, official docs accessed 2024. OFAC’s sanctions compliance guidance for the virtual currency industry outlines screening, blocking, and reporting controls that privacy-focused services must integrate to operate lawfully, source: U.S. Treasury OFAC Sanctions Compliance Guidance for the Virtual Currency Industry, Oct 2021. Market outcomes illustrate the trading impact: Binance announced the delisting of XMR in February 2024 amid heightened compliance focus, which reduced centralized venue liquidity for Monero, source: Binance Announcement, Feb 6, 2024. OKX also removed multiple privacy coins in early 2024, reinforcing the pattern of reduced listings and market depth for assets lacking selective disclosure, source: OKX Support Notice, Dec 27, 2023 and Jan 2024 update. Dutch authorities secured a conviction related to Tornado Cash operations in 2024, underscoring European enforcement posture toward opaque mixers and further elevating compliance risk premiums, source: District Court of ’s-Hertogenbosch judgment reported by the Netherlands Public Prosecution Service, May 2024. Taken together, on-chain privacy is possible without breaking the law when protocols implement sanctions screening, selective disclosure, and Travel Rule data transmission, but opaque mixing tools face sustained enforcement and delisting risk that can fragment liquidity and widen spreads for related tokens, source: OFAC 2021 guidance; EU TFR 2023; FCA 2023; FinCEN 2023.

According to the source, Arthur Hayes will appear on PrivacyInMotion with Midnight Network and Brave to discuss the trade-off between user privacy and systemic legitimacy and whether Bitcoin is truly private money, as posted on November 10, 2025. Source: the source post dated November 10, 2025. For traders, this theme ties directly to compliance obligations such as the FATF Travel Rule requiring virtual asset service providers to transmit sender and recipient information, which shapes exchange policies and liquidity conditions for privacy features and assets. Source: Financial Action Task Force, Recommendation 16 and related guidance. Bitcoin’s ledger is public and transactions can be linked on-chain, meaning BTC is pseudonymous rather than fully private, a fact that influences how privacy tooling and KYC frameworks interact with trading venues. Source: Bitcoin Whitepaper 2008, Section Privacy. Enforcement against privacy mixers has affected user access routes, exemplified by OFAC’s sanctions on Tornado Cash in 2022, a development traders monitor when assessing counterparty risk and potential flow disruptions. Source: U.S. Department of the Treasury, OFAC press release August 8, 2022. U.S. guidance classifies many custodial crypto services as money transmitters subject to KYC/AML, affecting onboarding and withdrawals that can alter spreads during policy headlines. Source: FinCEN Interpretive Guidance, May 9, 2019.

According to the source, Reid Hoffman said crypto is the preferred payment rail for ransomware targeting critical infrastructure and hospitals. source: Reid Hoffman on X, Nov 8, 2025 Ransomware remains a material regulatory headline risk for BTC and privacy coins, with Chainalysis estimating ransomware revenues exceeded $1.1B in 2023, primarily paid in BTC. source: Chainalysis, 2024 Crypto Crime Report U.S. Treasury and OFAC have sanctioned mixing services used by ransomware actors, including Sinbad in 2023, tightening compliance expectations at exchanges that handle BTC flows. source: U.S. Treasury/OFAC press release, Nov 2023 Major exchanges have delisted privacy coins amid compliance concerns, such as Binance removing XMR on Feb 20, 2024, highlighting liquidity and listing risk for privacy-focused assets. source: Binance Token Delisting Notice, Feb 6, 2024

According to @lookonchain, Richard Heart, founder of HEX, PulseChain, and PulseX, deposited 25,000 ETH approximately $102M into Tornado Cash within the past hour, based on on-chain monitoring, source: @lookonchain on X, Oct 26, 2025. Tornado Cash is designated by the U.S. Treasury’s OFAC, which increases compliance screening risk for related flows at exchanges and service providers, source: U.S. Department of the Treasury press release, Aug 8, 2022. Traders monitoring ETH can track subsequent wallet hops and any exchange inflows linked to this transfer to assess near-term liquidity and volatility, source: @lookonchain on X, Oct 26, 2025.

According to the source, a new article titled New Rules, Better Tools: How Crypto Is Maturing Through Privacy and Regulation highlights how privacy-preserving technologies and tightening compliance standards are shaping market structure and trading conditions (source: official X post dated Oct 6, 2025). For positioning in Europe, note MiCA’s phased implementation, with stablecoin rules effective June 30, 2024 and broader market integrity, disclosure, and licensing rules effective December 30, 2024, which define obligations for crypto-asset service providers and can influence exchange listings and liquidity routing (source: Official Journal of the European Union, Regulation (EU) 2023/1114). Cross-border flows remain sensitive to the FATF Travel Rule, which requires virtual asset service providers to transmit originator and beneficiary information and has uneven adoption across jurisdictions, a compliance factor that can affect venue selection and transfer friction (source: FATF Recommendation 16 and the June 2023 Targeted Update on implementation). U.S. sanctions enforcement against mixing services has redirected on-chain behavior and tightened exchange risk controls, a regulatory vector traders should monitor for spillovers to privacy-related assets and venue policies (source: U.S. Treasury OFAC, Aug 8, 2022 Tornado Cash designation and subsequent FAQs). On the tooling side, zero-knowledge proofs used in production zk-rollups demonstrate maturing cryptography that can validate transactions without exposing underlying data, informing the path for privacy-respecting compliance solutions that could enable regulated, capital-efficient trading (source: Ethereum.org, zk-rollups documentation).

According to the source, on-chain analyst ZachXBT reported that approximately $21 million was drained from wallets linked to SBI Crypto and funneled into Tornado Cash. source: ZachXBT on X, Oct 1, 2025. SBI Crypto is part of SBI Holdings, which is listed on the Tokyo Stock Exchange under ticker 8473. source: SBI Holdings corporate profile and Tokyo Stock Exchange listing. The reported destination was Tornado Cash, an Ethereum mixer designated by the U.S. Treasury’s OFAC on Aug 8, 2022, and U.S. persons are generally prohibited from transacting with it. source: U.S. Treasury OFAC press release (Aug 8, 2022); ZachXBT on X, Oct 1, 2025.

According to the source, ShapeShift agreed to a $750,000 settlement related to U.S. sanctions violations, underscoring ongoing regulatory scrutiny on crypto exchange compliance; source: X post dated 2025-09-23. This development fits a continuing OFAC enforcement pattern that previously saw settlements with Kraken for $362,158 in 2022, Bittrex for $24.3 million in 2022, and BitPay for $507,375 in 2021; sources: U.S. Department of the Treasury, Office of Foreign Assets Control press releases dated 2022-11-28, 2022-10-11, and 2021-02-18. Trading takeaway: headline risk around sanctions compliance can influence exchange-related assets and liquidity conditions, so monitor market depth, spreads, and funding rates around regulatory announcements; source: U.S. Department of the Treasury, OFAC enforcement history cited above.

According to the source, the U.S. Treasury’s Office of Foreign Assets Control announced sanctions on Iranian actors tied to more than $100 million in illicit oil sales facilitated with cryptocurrency, signaling heightened enforcement against crypto-enabled sanctions evasion (source: U.S. Department of the Treasury, Office of Foreign Assets Control). Traders should immediately review the latest OFAC SDN list updates and any newly identified wallet addresses to avoid tainted-flow exposure that could trigger account restrictions or asset blocks on U.S.-linked venues (source: U.S. Department of the Treasury, OFAC Sanctions Compliance Guidance). Historical precedent shows rapid compliance responses such as address blacklisting by stablecoin issuers and exchanges after OFAC designations, implying near-term counterparty and liquidity risk for affected on-chain paths (source: Circle compliance update following OFAC’s Tornado Cash designation; U.S. Department of the Treasury, OFAC). Non-U.S. intermediaries that facilitate significant transactions with designated parties face secondary sanctions risk, increasing off-ramp friction and settlement delays for flows touching Iran-linked networks (source: U.S. Department of the Treasury, OFAC Iran sanctions program guidance).

According to @1HowardWu, vilifying all crypto privacy technology because of Tornado Cash harms the ecosystem and the U.S. should pursue compliant privacy solutions instead of blanket prohibitions, positioning this as critical for American leadership in crypto (source: X post by @1HowardWu on Sep 1, 2025, https://twitter.com/1HowardWu/status/1962508745591882103). OFAC sanctioned Tornado Cash in August 2022 for facilitating laundering of more than $7 billion, including funds tied to the DPRK-linked Lazarus Group, prompting U.S. platforms to restrict interactions with the Ethereum (ETH) mixer and tighten compliance controls (source: U.S. Treasury OFAC press release JY0916, Aug 8, 2022, https://home.treasury.gov/news/press-releases/jy0916). Following the designation, mixer inflows declined while sanctioned actors sought alternative obfuscation methods, evidencing regulatory pressure on privacy tooling that influences on-chain liquidity routes traders rely on (source: Chainalysis analysis of mixer activity post-OFAC designation, 2023, https://blog.chainalysis.com/reports/tornado-cash-sanctions-mixers/). U.S. Treasury’s 2023 DeFi Illicit Finance Risk Assessment prioritizes closing AML/KYC gaps in DeFi and VASPs; traders should monitor policy moves shaping availability of compliant zero-knowledge and privacy solutions on U.S.-regulated venues that affect ETH DeFi flows and privacy-coin market access (source: U.S. Treasury, Illicit Finance Risk Assessment of Decentralized Finance, April 2023, https://home.treasury.gov/system/files/136/DeFi-Risk-Assessment.pdf; X post by @1HowardWu on Sep 1, 2025, https://twitter.com/1HowardWu/status/1962508745591882103).

According to Crypto Rover, the U.S. Treasury has removed Tornado Cash from the OFAC sanctions list, allowing U.S. individuals to legally engage with the platform. This could lead to increased trading activity for Tornado Cash, as regulatory barriers are lifted, making it more accessible to U.S. traders and investors. Traders should monitor market reactions and potential shifts in liquidity as this development unfolds.

According to @EleanorTerrett, the U.S. Treasury has removed Tornado Cash from its OFAC sanctions list, marking a significant win for decentralized finance (DeFi) platforms. This decision is expected to enhance liquidity and trading volumes in the DeFi sector, as Tornado Cash's prior blacklisting had restricted its use for privacy-centric transactions. Traders and investors may see this as an opportunity for increased DeFi adoption and a positive impact on market dynamics.

According to MistTrack, since the OFAC sanctions in April 2022, Garantex has adapted its hot wallet management to sustain operations. Initially, hot wallets were rotated approximately quarterly from April 2022 to December 2022. The frequency increased to weekly rotations from December 2022 to February 2023. From February 2023 onwards, Garantex has continued to adjust its hot wallet rotation strategy, although the specific frequency post-February 2023 was not detailed in the tweet.