Tornado Cash protocol blocks sanctioned addresses at the front end, but critics argue that it has no real significance.

The U.S. Department of the Treasury announced the address of the North Korean organization behind the $600 million hack of the cross-chain bridge Ronin in the blockchain game Axie Infinity. Shortly after, the North Korean hacker group used the coin mixing protocol Tornado Cash to launder the stolen funds, which then issued a statement indicating compliance with the sanctions imposed by the Office of Foreign Assets Control (OFAC) of the United States. Addresses under sanctions will no longer be able to utilize the Tornado Cash application.

Only the official front end is restricted, transferring addresses can bypass the restriction

Developers believe that people often overlook the difference between "on-chain smart contracts" and "setting up a front end," the former being decentralized and uncensorable, while the latter is centralized and can be censored.

In July 2021, Uniswap stopped supporting specific tokens on its platform for compliance reasons to avoid violating securities laws. However, the on-chain protocol of Uniswap itself still allows access by other unofficial front-end interfaces. The founder of Uniswap also stated at the time that being decentralized does not mean Uniswap Labs will let you do whatever you want on its website. It means you do not need a single interface to access the protocol.

Co-founder of Tornado Cash, Roman Semenov, also responded to users that there are no centralized front-end interfaces now; they are all on IPFS or independent servers.

Currently, it seems that Tornado Cash has also partially succumbed to regulatory pressure. Some users expressed to Roman Semenov that the Tornado Cash team is in Eastern Europe, where it is not easy for U.S. regulators to enforce. Roman Semenov responded that in fact, some co-founders are in the U.S. and Western Europe.

In a Bloomberg interview in March, it was mentioned that although the Tornado Cash protocol itself cannot be sanctioned technologically, they will still comply with U.S. law regardless.

In addition, users also pointed out that these sanctioned addresses can easily use Tornado Cash services by transferring to another address not on the list, in reality, blocking does not stop anything.