US State Department On Monday, the Treasury Department authorized Tornado Cash, a popular cryptocurrency mixer.bans Americans from using services that the government said “launder the proceeds of cybercrime.”
“Despite public guarantees, Tornado Cash is designed to prevent money laundering for malicious cyber attackers on a regular basis without basic measures to address the risks. It has repeatedly failed to impose effective controls over time.” Brian Nelson said in a statement.
Crypto-asset mixers are designed to mask the flow of money by blending someone’s tokens with other individuals’ pools of assets on the platform. Beyond traditional crypto platforms, it further hides the identities of people involved in transactions.
Tornado cache is used by some as a legitimate way to protect their privacy, but the government has banned illegal activities, including “facilitating robberies, ransomware schemes, fraud, and other cyber crimes.” says it helps.
“Criminal-supporting cryptocurrency mixers are a threat to U.S. national security,” the Treasury said.
The Tornado Cash website displayed on laptop and smartphone screens in London on Tuesday, March 15, 2022.
Luke McGregor | Bloomberg | Bloomberg | Getty Images
Tornado was used in several high-profile cryptocurrency heists this year. $615M token theft from Ronin, the network that supports the irreplaceable token game Axie Infinity, and the $100 million attack on US startup Harmony.both was linked by security researchers at the Lazarus Group, a hacking group backed by the North Korean government.
blockchain analytics company ellipse found At least $1.5 billion in proceeds from ransomware, hacks, fraud and other crimes have been laundered through Tornado Cash, whole Of the $100 million stolen from Harmony Bridge in June, it was laundered through this service.
The U.S. Treasury Department puts Tornado Cash’s figure much higher, saying it has been used to launder more than $7 billion worth of cryptocurrency since its launch in 2019. This number refers to the total amount of crypto assets sent through Tornado Cash. .
Some blockchain analysis tools were able to “separate” the cryptos sent via Tornado to identify the source of the funds. Elliptic says it was able to track down stolen cryptocurrencies from Harmony and find several new Ether wallets and more.
The action against Tornado Cash follows similar sanctions imposed against another popular service, Blender.io, in May 2022.
“The United States will continue to take action against mixers laundering cryptocurrency for criminals and their supporters,” said Secretary of State Anthony J. Blinken. statement on monday.
The Office of Foreign Assets Control (OFAC), a watchdog agency under the Ministry of Finance, has classified Tornado Cash and associated crypto wallet addresses as “List of Specially Designated NationalsAnyone who interacts with these wallet addresses could face criminal penalties, a cause for concern for some crypto holders with honest intentions.
“All transactions by or in (or in transit to) the United States involving the property or interests of designated or blocked persons by United States persons are authorized by general or specific licenses issued by OFAC. It is prohibited unless it is not or is exempt,” the Treasury Department said. Said.
But enforcing such a move could be difficult and overly restrictive for governments, according to Coincenter, a nonprofit focused on crypto regulation. This is because there is no person or entity behind the use of Tornado Cash.
The measure appears to be “a license for tools that are neutral in nature and can be used for good or bad like any other technology.” Written by Coin Center.
— CNBC’s Dan Mangan and Dawn Kopecki contributed to this report.