The United States Department of the Treasury sanctioned infamous cryptocurrency mixing service Tornado Cash on Monday, putting a freeze on the service for the near future. The sanctions come in response to over $7 billion in funds laundered through the service.

According to the Treasury Department's press release, the move comes after repeated assurances from Tornado that it was taking measures to cut back on its platform's use to launder illicit funds. The Treasury department has cited the platform's usage by terrorist and state-sponsored actors as a national security concern, especially considering the mammoth $620 million Axie Infinity hack carried out by North Korean hackers.

This is the second time that the Treasury has targeted a crypto mixer, with sanctioned in May over its own role in the Axie hack. Both Blender and Tornado have been used in a number of high-profile hackings, from Bitmart to Beanstalk.

What Being Sanctioned Means for Tornado Cash?

The move was carried out by the Office of Foreign Assets Control, the division of the Treasury responsible for carrying out sanctions in support of American economic security.

The OFAC's sanctions resulted in Tornado Mixed being added to the Specially Designated Nationals and Blocked Persons List, a list of entities "owned or controlled by, or acting for or on behalf of, targeted countries." As a result of becoming a "Specially Designated National" considered a threat to national security, Tornado Mixer's operations in the United States are effectively ended as of Monday.

"As a result of today's action, all property and interests in property of the entity above, Tornado Cash, that is in the United States or in the possession or control of U.S. persons is blocked and must be reported to OFAC," the Treasury explains. "In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt."

According to Tornado Cash's Twitter (TWTR  ), the company's GitHub repository, as well as the code repositories for its contributors, were all blocked. Contracts for the U.S. Dollar Coin were blocked, as were services from a number of partners. Tornado Cash's website was inaccessible at the time of writing, though it still appears in search results.

In response to the sanctions, many exchanges have also begun to refuse currency that has passed through Tornado to avoid potential legal troubles.

Is Tornado Cash Dead?

Being made an SDN carries stiff penalties for any involved, but it is not the end of the road. The Treasury itself has said that "the ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior."

Starting a dialog with the OFAC to resolve the concerns held by regulators and implementing necessary changes could help Tornado Cash eventually shake off SDN status. Doing so will require filing a petition and cooperating with the notoriously sluggish bureaucracy of the federal government, which will take some time.

Dealing with federal bureaucrats still seems to be the better option for the company than trying to find a bypass and could give well-meaning crypto investors a useful privacy tool back. While a replacement could arise, it would take time to materialize and could still run into regulatory issues if no measures are taken to prevent money laundering.