Tornado Cash has been identified as a risky opportunity by Intelligence Commissioner users. It is similar to Forex Capital Funds. We’ve received over 4 complaints against Tornado Cash.
Tornado Cash, a cryptocurrency mixing service, sought to promote anonymity by obscuring transaction records on the blockchain. It faced major legal action for allegedly laundering more than $7 billion, including $455 million stolen by the Lazarus Group. Developers were detained, and usage plummeted by 90% as a result of the sanctions, but the site remains contentious due to continuous unlawful use and worries about financial privacy and regulation.
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Key Takeaways
Is Tornado Cash Regulated? Do They Have a License?
Tornado Cash is a cryptocurrency mixing service that aims to improve anonymity by hiding transaction tracks on the blockchain. Its use, however, has been fraught with controversy, resulting in considerable legal actions.
Tornado Cash was sanctioned by the US Treasury Department’s Office of Foreign Assets Control (OFAC) in August 2022 for allegedly laundering more than $7 billion in virtual currency since its creation in 2019. This figure comprised more than $455 million stolen by the Lazarus Group, a North Korean state-sponsored hacking group.
The penalties restricted U.S. individuals and companies from communicating with Tornado Cash, resulting in the removal of its website and GitHub repository. This was the first time the US government had sanctioned a decentralized system rather than specific individuals or businesses, causing substantial debate and controversy.
Despite the fines and legal proceedings, Tornado Cash is still utilized for illegal activities, albeit on a smaller scale. According to blockchain analytics firm TRM Labs, Tornado Cash’s total usage decreased by 90% as a result of the US sanctions. However, some criminal actors continue to use the service, raising concerns about the efficacy of sanctions and legal proceedings in combating money laundering and other illegal operations using decentralized protocols.
Tornado Cash is the subject of a complex argument. While it has been linked to large money laundering activities, some maintain that it serves legitimate purposes, such as protecting the anonymity of peace activists or political dissidents. The decentralized structure of blockchain technology complicates legal procedures, needing a balance between regulation and the benefits of privacy and innovation.
The lack of regulation or the presence of poor regulation is a huge red flag. It means Tornado Cash is a scam and most likely, an illegal operation.
Companies offering investment services or opportunities without having a license can vanish without leaving a trace. Furthermore, the lack of a regulatory license allows them to get away with it and face no legal consequences.
That’s why it’s vital for you to always check a company’s regulation status as well as its license information. The presence of a license allows consumers to reach out to an authority if something goes wrong.
In the case of Tornado Cash, victims have nowhere to go due to the absence of a watchdog or license.
You should ask yourself the following questions when you come across a new investment firm or opportunity:
- Does the investment provider maintain transparency about its CEO?
- Do they have a license from a renowned regulatory authority?
- If the need arises, can I reach out to an authority to report this company as a scam?
Trading Conditions and Deposit/Withdrawal Methods at Tornado Cash
In August 2022, Dutch authorities detained Tornado Cash developer Alexey Pertsev on accusations of money laundering via the site. Pertsev was sentenced to 64 months in prison in May 2024 after being found guilty of laundering $1.2 billion in bitcoin using Tornado Cash.
Tornado Cash co-founders Roman Storm and Roman Semenov were charged by the US Department of Justice in August 2023 with conspiracy to commit money laundering, conspiracy to run an unauthorized money transmission service, and conspiracy to violate sanctions laws.
Roman Storm was caught in Washington state, but Roman Semenov is still at large in Dubai. The developers claimed that Tornado Cash was a decentralized system beyond their control, and that they were being persecuted for developing software that could be abused.
The sanctions and charges against Tornado Cash and its developers have raised serious concerns about financial privacy, free expression, and the advancement of decentralized technologies. Coin Center, a non-profit organization, sued OFAC in October 2022, alleging that the Tornado Cash sanctions violated its constitutional rights to free expression and due process. However, in August 2023, a federal judge determined that OFAC operated within its authority by sanctioning Tornado Cash, ruling that it matched the criteria for being a “entity” or “association” under applicable executive orders.
Critics believe that punishing engineers for inventing software that can be abused sets a bad precedent and may hinder innovation in the cryptocurrency field.
However, it’s worth noting that many scammers disable their payment channels before shutting down their operations.
They might give you multiple reasons including:
- A technical error
- A glitch in their system
- Banking issues
- A “hacking attack”
And many others.
But in 9/10 cases, the scammers stop making payments and keep the money to themselves. Hence, the payment methods we discussed here might not work.
If you want to get your money back from a scammer, you’d need to file a chargeback.
Tornado Cash Customer Service: Do They Handle Complaints Well?
When it comes to scammers, you should only measure the quality of their customer service if they respond to your complaint.
In the beginning, scammers tend to remain very accessible.
This means their representatives will keep calling you until you invest with them. Furthermore, they will act friendly and make it seem as if you’re one of their most valuable consumers.
However, they do all this just to win your trust.
Scammers understand that to convince someone to give them a large sum, they will need to seem like a friend.
Nevertheless, when you have invested a considerable amount of money and need to get it back, their customer support will become inaccessible.
All of a sudden, their numbers would either stop responding or become unavailable.
Still, they might remain accessible to convince you to invest further. Also, they might begin by making a few excuses regarding your payment.
However, in the end, customer support won’t resolve your issues and become increasingly unavailable.
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Tornado Cash Reviews: What Do Others Say?
It’s worth noting that many scammers tend to purchase fake reviews. Buying fake reviews has become extremely easy and it’s a multi-million dollar industry.
Scammers like Tornado Cash tend to purchase fake reviews for their online profiles to make themselves seem more credible.
TIME Magazine investigated the fake review industry and estimated it to be worth more than $150 million. Certainly, there are a ton of scammers who want to seem legitimate and a bunch of fake reviews is the most effective way to do so.
That’s why you shouldn’t trust Tornado Cash reviews easily.
It’s easy to identify fake reviews as well. You should look out for 5-star reviews posted by temporary accounts (profiles that only posted 1 or 2 reviews on the platform). Also, you should see if the positive reviews share any detailed information about their experience with the firm or not.
In the case of Tornado Cash, chances are, you wouldn’t find many legitimate reviews.
Another prominent way scammers like Tornado Cash enhance their credibility is by burying negative reviews and complaints under a lot of fake reviews.
This way, when you’ll look up “Tornado Cash reviews”, you might not find many complaints. Or, you might find them buried within numerous reviews praising Tornado Cash.
You should always look out for consumer complaints. In the case of Tornado Cash, the most common complaints I found were about:
- Poor customer support
- Delays in payments
- High fees
- Lack of transparency regarding their leadership team
- Aggressive sales staff
Do you have a similar complaint about Tornado Cash? You can share your complaint in the comment section or submit an anonymous tip.
Is Tornado Cash Legit Or a Scam?
Tornado Cash remains a source of contention due to its function in facilitating anonymous cryptocurrency transfers and its alleged usage for money laundering. The legal measures taken against its developers and the platform itself reflect persistent issues in the bitcoin space over financial privacy, regulatory control, and governance of decentralized technology.
The outcomes of these legal challenges are expected to influence the future landscape of cryptocurrency legislation and the development of privacy-focused solutions.
Tornado Cash is an unregulated entity. Although they might fall under the jurisdiction of a watchdog, they don’t have the license to offer financial services to consumers.
The lack of a license means they are not answerable to any regulatory authority. As a result, the people behind Tornado Cash can run away with your money without any prior notice. It would help if you were extremely cautious when dealing with an unregulated service provider.
The absence of a watchdog also means you cannot report to them to anyone.
Also, due to the absence of specific regulations, there is no provision protecting you from the insolvency of this entity. If they go bankrupt, you won’t be able to do anything about it.
Can You Trust Tornado Cash?
All the evidence suggests that Tornado Cash is a scam. If you have lost money to them, there is still a chance you can get it back.
To recover your funds, you’d need to file a chargeback.
Frequently Asked Questions
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How The Tornado Cash Online Scam Works
Intelligence Commissioner investigates & reviews online money-making opportunities. We strive to provide critically helpful information to our readers and assist them in identifying scams. 
