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21st August 2023 > > Tornado Cash and ETH ETFs.


Tornado Cash remains on the US sanctions list. ETH futures ETFs are set to get the nod from the SEC.

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A slightly positive start to the week for risk assets despite yields climbing another 5 basis points. Leveraged shorts continue to move further out of kilter, increasing the risk of a short squeeze on any good macro news.

Curious Cryptos’ Commentary – Tornado Cash

On the 10th of August last year the CCC reported that Tornado Cash had been sanctioned by OFAC (Office of Foreign Assets Control):

Mixers like Tornado Cash are simply open-source software designed to obfuscate the origin of specific coins, or parts thereof. There are legitimate reasons to do so. For example, individuals with a high profile in Russia who wish to contribute to the Ukrainian fight for freedom, might be well advised to use a mixer, for otherwise the growing trend for Putin’s critics to fall from high balconies would likely be exacerbated.

There is of course another obvious source of demand for mixers, and that comes from the criminal fraternity, and from North Korea. OFAC explained:

"OFAC determined that the DPRK’s malicious cyber-enabled activities threaten the United States and the broader international community and pose a significant threat to the international financial system."

OFAC accused Tornado Cash of laundering $7bn of crypto assets, though the lawsuit did not state the amount of lawful use of Tornado Cash.

After an appeal that claimed that OFAC had violated the First Amendment, the Judge has come down firmly on the side of the government:

Most RPCs (remote procedure calls) now censor all interactions with Tornado Cash, though as ever, there are technical workarounds.

All technology can be used for good things and bad things. This news demonstrates that the US government, issuer of the currency overwhelmingly used for money laundering in physical and digital form, is perfectly capable of penalising the misuse of crypto assets.

Curious Cryptos’ Commentary – ETH futures ETFs

Bloomberg have cited anonymous sources stating that the SEC will shortly approve a whole tranche of applications for an ETH futures ETF, with dates of the beginning of October being bandied around.

It was the approval of the first BTC futures ETF that helped to propel BTC to its ATH of nearly $70k nearly two years ago. History will not repeat this time.

Once again, the SEC demonstrates its inconsistent application of its rules in determining which products will get approval, and which won’t. You will recall that the SEC recently agreed to the launch of 2 times leveraged BTC futures ETF, whilst still denying a BTC spot ETF. That is an unconscionable decision that can never be justified if your objective is investor protection.

Still, if this report by Bloomberg is true, and there is no reason to suspect otherwise, that must surely raise the probability of a BTC spot ETF once the SEC has considered public responses to the four questions it has posed (

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