# Ketju research: Tornado Cash

- URL: https://riadefi.com/rejections/tornado-cash/
- Verdict: rejected
- Type: Other
- Reviewed: 2026-08-19
- Last confirmed: 2026-08-19

## Research summary

Our research assessment is adverse. Tornado Cash is privacy infrastructure, not an economic claim or income venue. Its AML, source-of-funds, custody-note, and counterparty-screening requirements put it outside the current firm shelf. That policy conclusion does not depend on yield. Treasury removed Tornado Cash sanctions in March 2025, so this is not an outdated sanctions rejection. The current fact is narrower: DOJ obtained a 2025 conviction for knowingly operating an unlicensed money-transmission business that moved criminal proceeds, while immutable pools provide no counterparty screening.

## Observable review triggers

- A client-specific privacy mandate is approved by counsel and compliance with documented lawful purpose and transaction-monitoring controls
- The custodian, banking, and tax-reporting counterparties confirm in writing that the proposed flow and compliance report are acceptable
- A proposed-size test preserves the withdrawal note and produces a complete source-of-funds report without an unapproved relayer

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Published by Ketju Research (https://ketjuresearch.com). Educational analysis only; not legal, tax, compliance, or investment advice.
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