U.S. sanctions Tornado Cash cryptocurrency mixer
The U.S. blacklisted Tornado Cash Monday, adding the virtual currency mixer to a sanctions list for allegedly helping launder the proceeds of cybercrimes — including nearly half a billion dollars stolen by the North Korean state-sponsored Lazarus Group.
Cryptocurrency mixers are services that can help hide the source of digital assets by pooling users’ cryptocurrencies together, jumbling them up, and allowing them to withdraw the amount they contributed in randomized assets — minus a cut for the service.
They can have legitimate uses such as increasingly the privacy of transactions, but are widely associated with a risk for money laundering — particularly the ill gotten gains of things like ransomware, which often ask victims to pay-up in cryptocurrency.
The Treasury Department alleges Tornado Cash has been “used to launder more than $7 billion worth of virtual currency since its creation in 2019.” Tornado Cash did not immediately respond to request for comment.
“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,” Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson said in a press release.
The Treasury Department alleges Tornado Cash was also used to launder funds related to cryptocurrency heists involving Harmony and Nomad. The agency first went after a cryptocurrency mixing service this May when it announced sanctions against Blender.io — also alleged to have helped launder money for the Lazarus Group.