What’s Twister Money?
Twister Money is a decentralized, non-custodial crypto mixer designed to reinforce transaction privateness on public blockchains. It makes use of sensible contracts and zero-knowledge (ZK) proofs to hide the onchain hyperlink between the sender and receiver of a transaction.
Launched by Roman Storm and Roman Semenov on Ethereum in 2019, Twister Money permits customers to ship and obtain cryptocurrency anonymously, with out exposing their pockets historical past. Not like centralized mixers, Twister Money operates totally onchain by way of immutable sensible contracts, which means no central celebration controls the funds.
When a consumer deposits crypto, resembling Ether (ETH), Twister Money generates a cryptographic observe, which the consumer can later use to withdraw the identical quantity to a distinct handle. The protocol was launched to spice up privateness in Ethereum-based transactions. Over time, the builders have expanded its performance to help a number of Ethereum Digital Machine (EVM)-compatible chains, together with BNB Good Chain (BSC), Optimism, Polygon, Arbitrum and Avalanche.
Twister Money helps a number of ERC-20 tokens and native ETH throughout Ethereum and different EVM-compatible blockchains. At its peak utilization, Twister Money supported a number of ERC-20 tokens, together with:
- On Ethereum: Ether (ETH), Dai (DAI), USDC (USDC), Tether’s USDt (USDT), Wrapped Bitcoin (WBTC).
- On different EVM chains (through sensible contract deployment): BNB (BNB), Polygon (POL), Avalanche (AVAX) and ETH on Arbitrum and Optimism.
Do you know? Twister Money launched in 2019 as an experiment in monetary privateness utilizing only a few sensible contracts. By 2022, it had processed billions in crypto transactions with out ever holding consumer funds straight.
How Twister Money works
Not like conventional monetary methods that prioritize customers’ privateness, blockchain public ledgers are accessible to everybody on blockchain explorers. Twister Money counters this by enabling nameless transactions by way of sensible contracts and zero-knowledge proofs, particularly zk-SNARKs.
Crypto mixers usually pool and shuffle customers’ funds, deduct a payment, and redistribute them. Twister Money, nevertheless, makes use of a pool-based system the place deposits are commingled in a wise contract, and withdrawals to new addresses are delinked utilizing zk-SNARKs, making certain anonymity with out random shuffling.
Right here’s the way it works:
- At its core, Twister Money has sensible contracts that break the onchain hyperlink between a sender and receiver.
- When a consumer deposits a cryptocurrency right into a Twister Money pool, the sensible contract points a cryptographic observe that the consumer can later use to withdraw the identical quantity to a distinct pockets handle with out revealing the hyperlink between the 2.
As Twister Money is a decentralized protocol, the underlying sensible contracts can’t be modified or destroyed by anybody, together with the Twister Money decentralized autonomous group (DAO).
The system makes use of ZK-proofs, which permit a consumer to show that they’ve the appropriate to withdraw a certain amount with out revealing what deposit was theirs. This mechanism ensures that deposits and withdrawals are mathematically linked however nameless.
Twister Money is non-custodial, which means it doesn’t maintain consumer funds at any level. The code runs independently and can’t be altered or managed by the builders. The funds can stay within the pool for so long as the consumer likes.
Earlier than sanctions, Twister Money was primarily accessed through its net interface by connecting a crypto pockets. Superior customers may additionally work together with the protocol’s sensible contracts straight utilizing a command-line interface.
How Twister Money obtained into hassle
Twister Money landed in authorized hassle primarily as a result of it was allegedly used to launder billions of {dollars} in illicit funds, together with crypto stolen in high-profile hacks. The Treasury Division’s Workplace of International Belongings Management (OFAC) sanctioned Twister Money on Aug. 8, 2022, below Government Order 13694.
There have been a number of causes behind Twister Money dealing with points with regulators:
- Facilitation of cash laundering: Twister Money was accused of facilitating cash laundering, with the OFAC claiming it processed over $7 billion in digital foreign money since 2019, roughly 30% of which was linked to illicit exercise, per Chainalysis.
- Assist for North Korean cybercrime: The platform was linked to laundering greater than $455 million stolen by the Lazarus Group, a North Korean state-sponsored hacking group.
- Risk to nationwide safety: The OFAC accused Twister Money of materially helping cyber-enabled actions originating exterior the US, posing a major menace to US nationwide safety, overseas coverage and financial stability.
- Lack of efficient controls: The Treasury highlighted Twister Money’s failure to implement satisfactory Anti-Cash Laundering (AML) measures, permitting malicious actors to use it.
- Obfuscation of illicit transactions: In line with the OFAC, Twister Money was facilitating nameless transactions by obscuring their origin, vacation spot and counterparties, enabling criminals to cover the proceeds of cybercrimes.
Twister Money was designed to obfuscate your complete transaction historical past. This function was useful for privateness, notably in use circumstances like payroll, donations and private spending, the place anonymity may be necessary.
Nevertheless, the very function that made it engaging for authentic use additionally made it interesting to unhealthy actors trying to launder cash or conceal illicit transactions. This drew important consideration from regulators, who grew to become involved concerning the potential for prison actions resembling cash laundering, terrorism financing or different types of illicit finance.
On March 21, 2025, the US Treasury lifted sanctions imposed by the Biden administration in opposition to Twister Money.
Do you know? In August 2022, the US Treasury sanctioned Twister Money sensible contracts, marking the primary time code, not an individual or group, was blacklisted. This sparked a heated world debate over open-source freedom.
Debate round Twister Money
The motion in opposition to Twister Money adopted comparable sanctions in opposition to Blender.io in Could 2022, signaling a broader regulatory push to handle cryptocurrency mixers. Such actions sparked an argument within the crypto neighborhood.
Critics of regulatory actions on the decentralized crypto mixers argue that sanctioning open-source code and punishing builders for creating privacy-preserving instruments pose a menace to free speech and innovation. It undermines the neutrality of blockchain instruments and units a precedent the place governments may censor software program itself, not simply its use.
However, advocates of hardened regulatory sanctions say it’s a mandatory step to fight crypto-related crime and that illicit exercise can’t be left unchecked. Whereas the protocol does have authentic makes use of, the dimensions of its illicit use, almost 30% of funds tied to illicit actors, outweighed these advantages.
They argue that the decentralized, non-custodial nature of the sensible contracts in such protocols, which can’t be modified or managed, complicates efforts to mitigate misuse. This leaves regulators with no possibility however to take motion in opposition to the protocol itself to discourage comparable platforms from working with out safeguards.
The Treasury held that the platform constantly did not implement efficient controls to stop cash laundering by malicious cyber actors. This lack of oversight allowed illicit actors to use the service with out restriction, prompting the necessity for regulatory intervention to curb unchecked abuse.
However, the case has arrange urgent questions on the best way to steadiness monetary privateness with safety and the way decentralized, permissionless methods can coexist with conventional authorized frameworks.
Do you know? The Twister Money protocol is ruled by a DAO, permitting tokenholders to vote on upgrades and proposals. Even after sanctions, the DAO continued to function briefly on-chain.
The efficacy of “sanctions” and their elimination
Regardless of sanctions, Twister Money remained operational by way of decentralized applied sciences like InterPlanetary File System (IPFS) and Tor. Its resilience led to doubts across the efficacy of sanctions on decentralized protocols and the broader implications for crypto regulation below evolving US coverage.
In line with Chainalysis, Twister Money saved performing on the darkish net regardless of the sanctions. Its entrance finish was obtainable on the IPFS and through The Onion Router (referred to as Tor). IPFS is a peer-to-peer, distributed protocol for information storage and sharing, whereas Tor is open-source software program enabling nameless communication, usually referred to as the darkish net.
Per Flipside Crypto information, Twister Money noticed $1.9 billion in deposits between Jan. 1 and June 30 in 2024, in comparison with $635.696 million in deposits throughout the identical interval in 2023.
Not like centralized providers, Twister Money is decentralized and autonomous, making it troublesome to close down or management. However the US authorities focused related infrastructure, together with GitHub repositories and web sites.
Developer Alexey Pertsev was arrested within the Netherlands on suspicion of concealing illicit monetary flows and facilitating cash laundering. Two of the co-founders, Roman Storm and Roman Semenov, had been charged in 2023 for involvement in additional than $1 billion in cash laundering.
A Dutch courtroom later suspended Pertsev’s pretrial detention. A US courtroom decided that Twister Money’s sensible contracts aren’t “property,” although authorized specialists observe this doesn’t clear the founders of different prices. Excessive-profile figures like Vitalik Buterin and Edward Snowden have publicly supported Pertsev within the matter.
The Treasury said {that a} overview of authorized and coverage points relating to sanctions in “evolving expertise and authorized environments” led to the repeal of sanctions. In January 2025, a US courtroom overturned the sanctions. The ruling got here after Joseph Van Loon and different Twister Money customers filed an attraction in opposition to the sanctions, arguing that the OFAC had overstepped its congressional authority by blacklisting the mixer in 2022.
In April 2025, a federal choose in Texas dominated that the US Treasury Division’s sanctions in opposition to Twister Money had been illegal and barred the company from reimposing them on the crypto mixer.
Twister Money sanctions repeal: What’s subsequent for crypto privateness?
The repeal of sanctions on Twister Money marks a pivotal second for decentralized finance (DeFi) and crypto privateness. It underscores the challenges of regulating permissionless, immutable methods whereas highlighting the rising authorized recognition of code as distinct from conventional property or entities.
For customers, the lifting of sanctions restores entry to a device designed for monetary privateness, doubtlessly boosting adoption for authentic use circumstances like shielding private transactions or defending delicate donations.
Nevertheless, the repeal doesn’t resolve the underlying pressure between privateness and regulatory oversight. Twister Money’s continued operation, even throughout sanctions, demonstrates the resilience of decentralized protocols but additionally their vulnerability to misuse.
Regulators worldwide are more likely to scrutinize comparable platforms, pushing for stronger AML and Know Your Buyer (KYC) frameworks, even in DeFi. This might result in hybrid options the place privateness instruments incorporate voluntary compliance mechanisms to discourage illicit exercise with out compromising consumer autonomy.
For Twister Money itself, the long run stays unsure. Whereas the protocol’s sensible contracts are immutable, its governance through the Twister Money DAO may evolve to handle regulatory issues, resembling implementing non-obligatory transparency options for compliant customers.
The authorized battles of its builders — Pertsev, Storm and Semenov — are ongoing, and their outcomes may form public notion and belief within the platform. A responsible verdict may deter builders from constructing comparable instruments, whereas acquittals would possibly embolden innovation in privacy-focused DeFi.
The Twister Money saga has additionally sparked broader discussions about the appropriate to monetary privateness within the digital age. Advocates argue that privateness is a basic proper, particularly in an period of pervasive blockchain surveillance, the place each transaction is traceable by default.
Critics, nevertheless, emphasize the societal value of unchecked anonymity, pointing to circumstances just like the Lazarus Group’s exploits. Hanging a steadiness would require collaboration between builders, regulators and the crypto neighborhood to make sure privateness instruments serve authentic customers with out changing into havens for crime.
Because the crypto panorama evolves, Twister Money will probably affect the subsequent era of privateness protocols. Rising applied sciences, resembling superior ZK-proofs or layer-2 scaling options, may allow much more strong privateness ensures whereas addressing regulatory issues. For now, the repeal of sanctions provides a reprieve for Twister Money and its customers, but it surely additionally units the stage for a brand new chapter within the ongoing debate over privateness, safety and the way forward for decentralized finance.
