Tornado Cash, the crypto mixing platform long under fire, is back in the spotlight—but this time with a positive twist. On Friday, the US Treasury made a surprising move by removing Tornado Cash wallet addresses from its Office of Foreign Assets Control (OFAC) sanctions list. The decision immediately caused a frenzy in the market, with its native token TORN spiking more than 73%, reclaiming the $15 price mark and registering over 100% weekly gains.

The Treasury's move, disclosed in an official press release, notes the economic sanctions have been lifted as part of their legal filing in the Van Loon v. Department of the Treasury case. However, the department emphasized its continued concerns over money laundering, particularly activities tied to North Korea’s notorious Lazarus Group. Still, the removal of Tornado Cash from the Specially Designated Nationals (SDN) list removes any official ban on using the platform within the United States.

This marks a turning point for Tornado Cash, which had been sanctioned in 2022 for allegedly aiding in the laundering of over $7 billion in digital assets. The US government claimed the mixer was a tool for bad actors, including North Korea’s Lazarus Group, to clean illicit funds. Following the sanctions, the Department of Justice indicted co-founders Roman Storm and Roman Semenov in 2023 for facilitating over $1 billion in crypto transactions linked to the group.

Earlier in 2024, Dutch courts found another co-founder, Alexey Pertsev, guilty of laundering around $1.2 billion in crypto through the platform. He was handed a 64-month prison sentence, signaling continued legal pressure on Tornado Cash developers. Now, with OFAC’s unexpected reversal, Storm and Semenov’s legal teams could gain new ground in their defense against the DOJ.

Beyond the courtroom, the announcement is being hailed by many in the crypto community as a major victory for privacy tokens and decentralized finance (DeFi) platforms. It suggests a possible shift in how US regulators view privacy tools, perhaps opening the door for a more nuanced stance that separates developers from bad actors using open-source code.

The sudden rise in TORN’s value is also partly driven by its low market cap, sitting at just $57 million. This means that even relatively small buy orders can create outsized price movements. Nevertheless, the token’s surge sent a wave of optimism through the privacy sector, with speculation that more tokens in the space could rally in the coming days.

All eyes are now on how this development will ripple through the broader DeFi and regulatory landscapes. For now, Tornado Cash’s removal from the sanctions list has provided a much-needed breather—not just for the platform’s developers, but for privacy advocates and crypto traders alike.