Definition ∞ Tornado Cash Laundering refers to the use of the Tornado Cash mixer protocol to obscure the origin and destination of cryptocurrency transactions. This process aims to anonymize funds, often utilized by malicious actors to conceal illicit gains from hacks or scams. The service combines multiple users’ funds, making tracing individual transactions exceptionally difficult.
Context ∞ The current situation involves significant regulatory scrutiny and sanctions against Tornado Cash due to its use in money laundering activities by sanctioned entities. A key debate addresses the conflict between financial privacy tools and anti-money laundering regulations and national security concerns. Future developments involve ongoing efforts by law enforcement to trace funds through mixers and the potential for new privacy-enhancing technologies that comply with regulatory requirements.
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