CustodyStress
Archive › Legal or authority constraint
Part of the CustodyStress archive of observed Bitcoin custody incidents
CS-01055

Sanctions lockout — hardware wallet (2022)

Indeterminate
Case description
On 8 August 2022, OFAC sanctioned Tornado Cash, a smart contract-based cryptocurrency mixer, making it illegal for US persons to interact with the protocol. Several wallets that had received unsolicited Tornado Cash transactions—sent by third parties as a 'dust' attack—found that some exchanges subsequently froze or flagged those wallets. Legitimate Bitcoin and crypto holders whose addresses had been associated with the protocol through no action of their own faced unexpected access constraints at custodial platforms.
Custody context
Stress conditionLegal or authority constraint
Custody systemHardware wallet (single key)
OutcomeIndeterminate
DocumentationUnknown
Year observed2022
CountryUnited States
Structural dependencies observed
Legal process requiredInstitutional cooperation required
What this illustrates
Before anyone could access the funds, a legal process had to be completed first. It's not clear whether anyone ever regained access.
Outcome interpretation
Not enough information is available to determine the outcome.
Source
Publicly Reported
Evidence type
News article
Evidence link
https://en.wikipedia.org/wiki/Bankruptcy_of_FTX
Related cases involving legal or authority constraint
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Legal authority constraint — hardware wallet (2025)
Hardware wallet (single key) · 2025 Constrained
Legal authority constraint — exchange custody (2025)
Exchange custody · 2025 Constrained
39 cases involve legal or authority constraint 274 cases involve hardware wallet (single key) View archive statistics →
This archive documents observed custody survivability failures. It does not attempt to document all Bitcoin losses or security incidents. Submit a case
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Framework references
Where Bitcoin Custody Intersects Legal and Fiduciary Authority
Where custody creates gaps in estate planning, fiduciary duty, and professional responsibility.
Professional Scope Boundary Matrix
What each professional or product covers, what they do not, and where gaps form between them.
The Independent Assessment Layer in Bitcoin Custody
How independent diagnostic layers emerge when multiple parties depend on shared infrastructure.
Terms guide
Outcome terms
Survives
Access remained possible under the reported conditions.
Constrained
Access remained possible, but only with delay, dependence, or significant difficulty.
Blocked
Access was not possible under the reported conditions.
Indeterminate
There was not enough information to determine the outcome.
Structural terms
Single-person knowledge
Recovery depended on information or capability held by one individual who was unavailable.
Institutional dependence
Recovery depended on a third-party institution or service that was inaccessible or uncooperative.
Documentation gap
Recovery depended on instructions that were missing, incomplete, or unclear.
Authority mismatch
The person with legal authority to act did not have operational access, or vice versa.
Original text
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