Crypto Mixer Tornado Cash Faces US Sanctions: Here's Why
Tornado Cash has reportedly laundered over $7 billion in virtual currency since its inception in 2019.
Tornado Cash, a decentralised mixer protocol that enables private transactions on Ethereum, has been slapped with sanctions by the United States as the platform has been accused of assisting hackers from different nations, including North Korea, to launder proceeds from cybercrimes. For those unaware, crypto mixers help obfuscate the source and destination of crypto assets by mixing a client’s digital money, like cryptocurrencies, with that of other users to create multiple combinations. While crypto mixers are not illegal, their nature of operation makes them a tool of choice for bad actors.
As per a US Treasury Department official, Tornado Cash has laundered over $7 billion in virtual currency since its inception in 2019, as reported by Reuters. The sanction freezes all US assets held by Tornado Cash, barring US citizens to deal with it.
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The Treasury added that North Korea-backed Lazarus Group has laundered at least $455 million through Tornado Cash. Lazarus Group, already under US sanctions, is a hacking outfit that has carried out several data breaches.
Back in June, Tornado Cash was reportedly used to launder nearly $100 million from a hack into virtual currency firm Harmony, and earlier this month, around $190 million from the Nomad hack.
In May this year, another virtual currency mixer, Blender, was also targeted by the US Treasury, marking the first time a mixer was hit with sanctions.
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