Launchy Regulatory Roundup #31 - Treasury Lifts Sanctions on Tornado Cash

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Welcome to our 31th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

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Some agencies are loosening the reins, others are doubling down, and the courts? They're starting to call the shots. Meanwhile, global regulators are tuning their instruments for the same chaotic orchestra. Buckle up—crypto policy is entering its political phase.

In Today's Edition:

• Headline: Treasury Lifts Sanctions on Tornado Cash 🌪️ 

• Global Legal Roundup: Stablecoin Bill is Likely in ‘Next 2 Months? 👀 

• Case Study: Crypto Debanking May Persist Until 2026 🔎 

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HEADLINE

Treasury Lifts Sanctions on Tornado Cash

State of play: The US Treasury Department has lifted economic sanctions on Tornado Cash, a crypto protocol that anonymizes blockchain transactions, nearly three years after initially blacklisting it.

• The move follows a court ruling that the Office of Foreign Assets Control exceeded its authority, and a US Di

  strict Court order to reverse the sanctions.

• OFAC originally sanctioned Tornado Cash in August 2022, citing its use by North Korean hacking group Lazarus to launder stolen crypto assets.

• The group has been linked to several major hacks, including the $1.4B Bybit breach.

• Treasury Secretary Scott Bessent emphasized the need to secure the digital asset industry from misuse while fostering innovation.

• Tornado Cash uses a mixing process to obscure transaction origins, raising both privacy and regulatory concerns.

What’s Next: Future regulatory oversight is still expected as privacy tools remain under scrutiny.

Why it Matters: This decision sets a precedent for how US sanctions law applies to decentralized protocols, highlighting limits on regulating open-source software and shaping future cases on crypto privacy tools.

Our Take: The court’s pushback signals growing recognition that privacy-enhancing technologies can’t be regulated like traditional entities.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 Minnesota senator proposes Bitcoin Act.

• 🇺🇲 Ripple CEO says legal battle with SEC 'has ended.'

• 🇺🇲 Senate hearing for Paul Atkins scheduled for March 27.

• 🇺🇲 Congress on track for stablecoin, market structure bills by August.

• 🇺🇲 LIBRA orchestrators named as defendants in US class-action suit.

• 🇺🇲 North Dakota Senate passes crypto ATM bill limiting daily tx to $2K.

• 🇺🇲 SEC says proof-of-work mining does not constitute securities dealing.

• 🇺🇲 Crypto council head says that stablecoin bill is likely in ‘next 2 months.’ 

• 🇧🇷 Brazilian lawmakerintroduces bill to regulate Bitcoin salaries.

Europe:

• 🇩🇪 German financial regulator prohibits sales of Ethena’s USDe.

• 🇷🇺 Russia civic chamber proposes dedicated fund for confiscated crypto.

APAC:

• 🇰🇷 South Korea to block non-compliant crypto exchanges.

• 🇦🇺 Australia outlines crypto regulation plan, promises action on debanking.

• 🇵🇰 Pakistan Crypto Councilproposes using excess energy for BTC mining.

CASE STUDY

Crypto Debanking May Persist Until 2026

State of play: Despite recent pro-crypto signals from US regulators and Donald Trump, crypto debanking issues may persist until at least January 2026, according to Custodia Bank CEO Caitlin Long.

• She cited ongoing pressure from the Democrat-controlled Federal Reserve, which is still scrutinizing crypto-friendly banks.

• Long warned that unless a new Fed governor is appointed—something Trump can’t do until 2026—the disconnect between agencies like the OCC, FDIC, and the Fed could stall real change.

• Similar debanking challenges continue in the EU, making banking access one of the industry's biggest unresolved hurdles globally.

Our Take: The persistence of crypto debanking underscores a deeper structural issue in the U.S. regulatory landscape: fragmented oversight and political influence.

• While agencies like the OCC and FDIC are beginning to shift toward a more crypto-friendly posture, the Federal Reserve remains a critical bottleneck.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our comprehensive database of crypto regulations around the world👇

NOTEWORTHY READS & MEME

• Rebecca Rettig’s read on JitoSOL securities clarification.

• DEF’s read on Tornado Cash delisting from SDN and blocked persons list. 

• Bill Hughes’s read on unhosted wallet & Electronic Funds Transfer Act (EFTA).

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.