Tornado Cash is a decentralized protocol dedicated to private transactions on the Ethereum (ETH) blockchain. Currently, the US Treasury accuses it of laundering more than $7 billion worth of cryptos since its inception in 2019. To this effect, Americans have received a formal ban from using this cryptocurrency mixer.
Tornado Cash, the crypto mixer, now blacklisted by the US Treasury
According a tweet from CoinDesk on August 8, “the US Treasury has banned all Americans from using the Tornado Cash cryptocurrency mixer“. Americans should also avoid all Ethereum (ETH) wallet addresses linked to this protocol. Any person who does not respect this rule exposes himself to penal sanctions. According to the US Treasury Department, North Korean hackers are using Tornado Cash to launder stolen cryptos.
The hackers in question would form a group called Lazarus Group. They are said to be linked to the Axie Infinity Ronin Bridge hack, which caused $625 million in losses. The Treasury Department said an analysis found that Tens of Millions of Dollars in Crypto Stolen from Ronin transited through Tornado Cash. Hackers could easily use this platform because it was designed to conceal the origin of the funds.
In this context, the Office of Foreign Assets Control (OFAC) added the mixer to its blacklist. Note that OFAC is a monitoring agency whose role is to prevent sanctions violations. The agency previously sanctioned Blender.io for similar reasons. This other crypto mixer was allegedly used to launder $20.5 million worth of cryptocurrencies stolen from Ronin.
According to a senior US official, “Tornado Cash has been the mixer of choice for cybercriminals looking to launder illicit proceeds.” The mixer is said to have encouraged hackers in their actions “by covering up the origin and transfer of illicit cryptos”.
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