Binance, the world’s largest cryptocurrency exchange, has delisted the governance token TORN of the crypto mixer Tornado Cash, an entity sanctioned by the U.S government. The move is an important signal that the recently disgraced exchange is attempting to stay on the good side of U.S authorities.
Earlier this year, the U.S Department of Justice (DOJ) charged Tornado Cash, a cryptocurrency mixer service, and its founders with money laundering and sanctions violations. The move follows a historic Binance-DOJ deal in which the exchange admitted to serious wrongdoing and paid $4.3 billion in fines.
Cryptocurrency mixers or tumblers are services that attempt to obscure the source of cryptocurrency funds by mixing potentially identifiable crypto funds with others. The mixed funds are then returned to users in a way that aims to break the connection between the original funds and their source.
TORN, the delisted token, is used to vote on proposals for upgrading the protocol, and is down approximately 50% over the previous seven days following the news.
On August 8, the Department of Justice accused Tornado Cash founders Roman Storm and Roman Semenov of conspiring to launder over $1 billion in crypto funds and violating sanctions by doing business with North Korean hacking groups.
According to the indictment, Tornado Cash advertised fully private and untraceable transactions to customers. By not implementing anti-money laundering checks, the platform enabled use by cybercriminals seeking to cover their tracks.
U.S. Attorney Damian Williams stated that while Tornado Cash claimed to offer advanced privacy features, its founders knowingly helped “hackers and fraudsters conceal the fruits of their crimes.”
He added that attempting to launder funds through crypto does not place perpetrators above the law or make their schemes untraceable.
Tornado Cash became a focus for authorities after allegedly handling hundreds of millions in cybercrime proceeds for North Korea’s Lazarus Group. The U.S. Treasury sanctioned Lazarus for crimes, including bank heists, ransomware attacks, and crypto theft. Though aware that Tornado Cash facilitated transactions violating sanctions, federal prosecutors said its founders only pretended to implement compliance changes.
It’s not the only time the U.S. government has targeted Tornado Cash. In August 2022, the Treasury Department sanctioned the mixer, accusing it of enabling cybercrime and evasion of existing sanctions.
Specifically, Tornado Cash allegedly laundered over $455 million stolen by North Korean state hackers Lazarus Group. The designation made it illegal for U.S. persons to access or possess Tornado Cash’s services.
According to the latest information at CoinMarketCap , the delisting of TORN on Binance leaves the token without support from a major centralized exchange. A fact that only helps to illustrate the exchange’s brazen history of ignoring U.S authorities. Only Gate.io and MEXC continue to support TORN trading pairs. They currently sit 16th and 10th, respectively, in terms of 24-hour trading volume.
The change of direction should perhaps be no surprise. Richard Teng, the new Binance CEO, has a background at Singapore’s central bank and as the former CEO of Abu Dhabi Global Market, a financial-free zone. Before taking the top job, Teng was previously Head of Regional Markets at the exchange.
In a recent interview with Fortune , Teng revealed that the disgraced exchange will now adopt a conventional corporate structure, become more transparent, appoint a board of directors, establish an address, and behave like a fully compliant business.
Removing TORN, a token linked to a sanctioned entity, appears to be the first step on a very long journey.