BlackRock Tokenized Fund BUIDL Receives Funding from Tornado Cash
BlackRock, the world’s largest asset management company, has launched its first tokenized fund on the Ethereum blockchain called the BlackRock Institutional Digital Liquid Fund (BUIDL). However, the associated address has not only received a bunch of meme coins but also ETH sent from the sanctioned mixing protocol Tornado Cash.
BUIDL is BlackRock’s first currency-type fund issued on Ethereum, aiming to provide a stable value of $1 per token and distribute daily accrued dividends as new tokens directly to investors’ wallets. The fund will invest 100% of its assets in cash, US Treasury bonds, and repurchase agreements, allowing investors to earn returns while holding tokens on the blockchain.
According to data from blockchain analytics firm Arkham Intelligence, the address has received $100 million in USDC and numerous meme coins such as SHI and PEPE, but the troublesome part is the 0.97 ETH transferred from the Tornado Cash mixing protocol.
The well-known mixing protocol Tornado Cash was sanctioned by the US Office of Foreign Assets Control (OFAC) in August 2022. According to regulations from the US Treasury Department, any US person (or financial institution) holding frozen assets (such as ETH) in Tornado Cash must report it to OFAC.
This poses potential legal risks for wallets that receive unsolicited funds from Tornado Cash. Ethereum co-founder Vitalik Buterin, Coinbase CEO Brian Armstrong, and NFT artist Beeple have all faced similar situations in the past.
According to data from deBank, 0.97 ETH (approximately $3,324) has been transferred from Tornado Cash to wallets associated with BUIDL.
With the listing of Bitcoin spot ETFs, traditional financial institutions are forming deeper connections with blockchain. Currently, only Bitwise has publicly disclosed its wallet address, but most fund companies’ addresses are gradually being identified by blockchain analytics firms.
Since wallets can only passively receive funds, if malicious individuals use sanctioned addresses to send funds, it will cause numerous legal troubles. This is also a challenge that traditional financial companies face when entering the blockchain space. Moreover, once addresses are made public on the blockchain, all transactions are real-time and transparent, and fund flows can be monitored at any time.
In addition, BlackRock’s BUIDL also challenges the 24/7/365 mode without business hour limitations, allowing investors to transfer their tokens to other pre-approved investors.
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