The U.S. Treasury on Monday imposed sanctions on virtual currency mixer Tornado Cash for its alleged role in helping hackers, including from North Korea, to launder proceeds from their cybercrimes.
According to a senior Treasury official, Tornado Cash, a type of anonymizing virtual currency exchange designed to preserve the privacy of blockchain users, has laundered more than $7 billion in virtual currency since it was created in 2019. The official added that the well-known North Korean government-backed hacking group, the Lazarus Group, which has conducted numerous data breaches, has laundered at least $455 through Tornado Cash. Tornado Cash was most recently implicated in a $100 million hack into virtual currency firm Harmony in June, and also in the breach of Nomad involving the loss of $8 million.
The move from Treasure is the latest escalation in a series of enforcement against Tornado Cash and other crypto mixers such as Blender.io, which help to obfuscate crypto transactions by pooling funds together and then redistributing them to contributors. Brian E. Nelson, undersecretary of the Treasury for terrorism and financial intelligence said in a statement that the mixer had not taken the necessary steps to prevent its services from being used by some of the most prolific cybercriminals. He added,
Today, Treasury is sanctioning Tornado Cash, a virtual currency mixer that launders the proceeds of cybercrimes, including those committed against victims in the United States. Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks. Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them.
The U.S Treasury official described mixers as an automated money-laundering service, used to facilitate anonymous transactions by mixing funds from multiple sources before distributing them to their ultimate beneficiary. Tornado Cash is the second mixer service to be sanctioned by the Treasury Department after it issued sanctions against Blender.io in May, which was also allegedly used by North Korean hackers to launder proceeds gained from hacking. Following the sanctions being imposed, it appears as though Blender.io is no longer operating according to the official.
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Source: https://cryptodaily.co.uk/2022/08/us-treasury-bans-tornado-cash-mixer-for-its-role-in-crypto-money-laundering