The U.S. Department of the Treasury Sanctions Virtual Currency Mixer Tornado Cash
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has taken action against virtual currency mixer Tornado Cash. The sanctions were issued on Monday, citing Tornado Cash’s involvement in laundering over $7 billion worth of virtual currency since its establishment in 2019.
Key Points:
- Tornado Cash has been used to launder funds from cybercrimes, including those perpetrated by the Lazarus Group, a North Korean hacking group.
- The mixer was also involved in laundering funds from cyber heists such as the Harmony Bridge Heist and the Nomad Heist.
- Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson, stated that Tornado Cash failed to implement effective controls to prevent the laundering of funds for malicious cyber actors.
- As a result of the sanctions, all property and interests of Tornado Cash within the U.S. or under the control of U.S. persons are to be blocked and reported to OFAC.
Virtual Currency and Illicit Activity:
The Treasury’s Office highlighted that while most virtual currency transactions are legitimate, there is a risk of illicit activities such as sanctions evasion through mixers, peer-to-peer exchangers, darknet markets, and exchanges. These platforms can facilitate a range of cybercrimes, including heists, ransomware schemes, fraud, and other illegal activities.
OFAC emphasized its commitment to taking action against entities that enable the laundering of virtual currency for criminal purposes. The recent sanctions on Tornado Cash follow a previous fine imposed on cryptocurrency mixing service Blender.io for its involvement in laundering stolen funds from the Ronin Network.
Overall, the Treasury continues to actively pursue measures to combat illicit activities in the virtual currency space and protect against the misuse of digital assets for criminal purposes.