Key points:
- The US Treasury Department Has Sanctioned Crypto Mixing Service Tornado Cash
- North Korea Hackers Have Been Tied To Cryptocurrency Hacks
- What Is Tornado Cash?
The US Treasury Department has barred all US citizens from using the crypto-mixing service, Tornado Cash. In a press release, the Treasury cited Tornado Cash’s role in the laundering of stolen cryptocurrency, particularly those linked to in major hacks by North Korean hacking groups.
The US Treasury Department Has Sanctioned Crypto Mixing Service Tornado Cash
The popular cryptocurrency service, Tornado Cash, was sanctioned on Monday by the US Treasury Department. According to the press release, this was due to Tornado Cash being “used to launder more than $7 billion worth of virtual currency since its creation in 2019.”
Brian E. Nelson, the Under Secretary of the Treasury for Terrorism and Financial Intelligence stated, “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.”
This sanctioning means that Americans are banned from using the service. The Treasury Department said, “All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt.”
These sanctions against Tornado Cash follow similar actions previously imposed on another popular mixing service, Blender.io, in May 2022.
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North Korea Hackers Have Been Tied To Cryptocurrency Hacks
Tornado Cash allows users to mask their transactions, and officials announced on Monday that this has seen the laundering of virtual currency worth over $7 billion since 2019. Furthermore, and more specifically, the US Treasury notes that this includes more than $455 million stolen by North Korean hackers, The Lazarus Group.
This is believed to be a Democratic People’s Republic of Korea state-sponsored hacking group, which was sanctioned by the U.S. in 2019 for the largest known virtual currency theft.
What Is Tornado Cash?
The Tornado Cash platform enables anonymous transactions by mixing funds from different sources before sending them to the eventual beneficiary. According to the Tornado Cash information site, “Tornado Cash improves transaction privacy by breaking the on-chain link between source and destination addresses. It uses a smart contract that accepts ETH & other tokens deposits from one address and enables their withdrawal from a different address.”
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