> As a result of today’s action, all property and interests in property of the entity above, Tornado Cash, that is in the United States or in the possession or control of U.S. persons is blocked and must be reported to OFAC.
My understanding is that it is now illegal for U.S. people to use the Tornado Cash smart contract. Given that Ethereum is pseudonymous, I'm not sure how they plan to enforce that, but I guess they could catch people who use it directly through a KYCed account (e.g. Coinbase).
> All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt.
This is also not clear. Are people who use or have used Tornado Cash now designated/blocked persons? Or is the smart contract itself the "blocked person"?
If the former, how is that even possible to enforce? U.S. persons are no longer allowed to accept coins that can can be traced back to Tornado Cash usage in the past? What are they supposed to do with the "tainted" coins? Send them to the U.S. Treasury? Destroy them? Or are you supposed to ask your customers if they have used Tornado Cash in the past? What if they lie? etc.
If the latter[0], it would mean that it's illegal for U.S. persons to accept transactions originating from the Tornado Cash smart contract. But that can be bypassed trivially by going through an intermediary address before sending the ETH.
[0] I believe that interpretation is more likely given that they gave a list of addresses: https://home.treasury.gov/policy-issues/financial-sanctions/...