Tornado Cash has been sanctioned by the U.S. Treasury Department. According to a statement, the protocol “failed to apply appropriate safeguards” to stop money laundering related to cybercrime.
Tornado Cash has not yet provided any feedback on the situation.
Tornado Cash Sanctioned By The Treasury Department
Tornado Cash has been outlawed by the US Treasury Department.
The well-known Ethereum mixing tool was sanctioned on Monday by the federal agency’s Office of Foreign Assets Control. The website for the protocol and the connected smart contracts have been blocked, according to a notice on the Treasury’s website.
Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson stated in a press release:
“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. 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. Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them.”
The protocol had allegedly been used to launder more than $7 billion worth of virtual currency since its establishment in 2019, according to the press release. Tornado Cash has witnessed $7.6 billion in lifetime volume, according to Dune statistics provided by @poma, indicating that the Treasury may be treating all prior transactions as attempts to “launder” money.
Hacking Group Sponsored By The DPRK Government
Anthony Blinken, secretary of state, also published an update on the ban with the questionable assertion that Tornado Cash was a “DPRK state-sponsored hacker outfit.” The government would remain aggressive in pursuing measures against currency mixers laundering virtual currency for criminals, he continued.
With the help of the well-known application Tornado Cash, Ethereum users can conceal their transactions and protect their anonymity. To make their on-chain behavior more difficult to track, it allows users to put their assets into smart contracts and subsequently withdraw them from a different address.
For many users, Tornado Cash has grown to be a cornerstone of the Ethereum ecosystem, but it has also earned infamy due to its appeal to hackers. Tornado Cash is frequently used by hackers in DeFi hacks on Ethereum to hide their trails and escape with the money they have stolen. The protocol has been used to channel more than $1 billion in illegal funds over the previous 12 months.
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