BlackRock's tokenized fund BUIDL receives funding from Tornado Cash

BlackRock, the world's largest asset management company, has launched its first tokenized fund on the public Ethereum blockchain called the BlackRock Institutional Dollar (BUIDL) fund. As a result, the related address not only received a bunch of meme coins but also ETH sent from the privacy-oriented mixing protocol Tornado Cash, which is subject to sanctions.

BlackRock has introduced the tokenized fund BUIDL on Ethereum and made a strategic investment in Securitize.

BlackRock's First Challenge to Issue Fund on Ethereum

BUIDL is BlackRock's first currency fund issued on Ethereum, aiming to provide a stable value of $1 per token and distribute daily accrued dividends as new tokens directly to investors' wallets each month. The fund will invest 100% of its total assets in cash, U.S. Treasury bonds, and repurchase agreements, allowing investors to earn profits while holding tokens on the blockchain.

According to data from blockchain analytics company Arkham Intelligence, the address has received $100 million USDC and numerous meme coins such as SHI and PEPE, but the most troublesome part is the 0.97 ETH transferred in from the privacy protocol Tornado Cash.

Tornado Cash Previously Sanctioned

The popular privacy protocol Tornado Cash was sanctioned by the U.S. Office of Foreign Assets Control (OFAC) in August 2022. According to the U.S. Treasury regulations, any U.S. individuals or financial institutions holding frozen assets such as ETH in Tornado Cash must report to OFAC.

This poses potential legal risks for wallets receiving unsolicited funds from Tornado Cash. Ethereum founder Vitalik Buterin, Coinbase CEO Brian Armstrong, and NFT artist Beeple have all encountered similar situations.

According to deBank data, 0.97 ETH, approximately $3,324, has been transferred from Tornado Cash to a wallet related to BUIDL.

Transparent On-Chain Addresses Face New Challenges

With the listing of Bitcoin spot ETFs, traditional financial institutions are forming deeper connections with blockchain. While only Bitwise actively discloses wallet addresses, most fund companies' addresses are gradually being tagged by blockchain analytics firms.

Bitwise revealed the wallet address for the Bitcoin spot ETF BITB and immediately received 6969 sats.

Since wallets can only passively receive funds, maliciously sending funds from sanctioned addresses can cause legal troubles, posing a challenge for traditional financial companies entering the blockchain space. Once on-chain addresses are public, all operations are real-time and transparent, with fund flows being monitored at all times.

Furthermore, BlackRock's BUIDL challenges the 24/7/365, unrestricted trading model, allowing investors to transfer their tokens to other pre-approved investors.