In a dramatic turn of events, the governance token linked to the crypto mixer Tornado Cash, (TORN) has dropped by more than 50% since November 26th, according to CoinMarketCap data. This decline occurred when Binance, a well-known cryptocurrency exchange, intended to remove the token from its platform.
The TORN token, which plays a crucial role in the voting process for upgrading the Tornado Cash protocol, experienced a significant decline in value, dropping from $3.90 to $1.66 in just one day. This represents a sharp 57% decrease in value, which occurred in tandem with Binance’s announcement that it would no longer accept TORN deposits after December 8, and withdrawals would no longer be processed after March 7, 2024.
Earlier this year, Tornado Cash faced severe challenges when it was subjected to sanctions by the United States Office of Foreign Asset Control due to its alleged involvement in facilitating money laundering activities. The development has led to increased scrutiny and regulatory compliance for Tornado Cash, highlighting the importance of adhering to anti-money laundering regulations for companies operating in the blockchain and cryptocurrency space.
Due to regulatory concerns, Binance decided to remove TORN from its platform despite previously listing assets that were unavailable to U.S. residents. Subsequently, it came to light that Binance had provided services to U.S. customers without proper licensing, leading to a plea deal with the United States Department of Justice and an acknowledgment of the violation.
The Binance team, in its official statement, highlighted the necessity of maintaining stringent standards for listed assets. The team underscores the importance of periodic reviews to ensure that the tokens uphold these standards. The Binance team asserted:
When a coin or token no longer meets this standard or the industry changes, we conduct a more in-depth review and potentially delist it.
The recent events have caused a stir in the crypto community, prompting concerns about regulatory compliance and the effect of exchange delistings on token prices. The aftermath of Binance’s action and the regulatory obstacles that Tornado Cash is encountering are significant, creating doubts about the future outlook of TORN and the overall cryptocurrency industry.