US Sanctions 'Tornado Cash' for Laundering Crypto Funds for North Korea
The US is sanctioning Tornado Cash, an Ethereum “mixing” service, for allegedly helping North Korea launder millions of dollars stolen in cryptocurrency hacks.
On Monday, the US Treasury Department announced the sanctions(Opens in a new window), citing Tornado Cash’s refusal to block the illegal activity occurring over the service.
According to US officials, North Korean hackers tapped Tornado Cash to launder some of the funds stolen from the $622 million Ronin Network hack back in March. The service was also used to launder funds taken from the $100 million heist at blockchain provider Harmony, which some cryptocurrency experts also suspect involved North Korean hackers.
“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,” Brian Nelson, US Under Secretary for the Treasury Department, said in the announcement.
Founded in 2019, Tornado Cash anonymizes Ethereum transactions by using its stockpiles of cryptocurrency to essentially mix the deposited Etherum in an effort to obscure the original source of the funds. Tornado Cash can then withdraw the funds for the user to a new address.
Tornado Cash currently has over 39,000 unique users and markets itself as a provider of private transactions. But US officials point out the same anonymization techniques make Tornado Cash ideal for laundering ill-gotten gains.
Monday’s sanctions mean US citizens, businesses, and residents are now barred from making transactions via Tornado Cash, unless they receive clearance from the Treasury Department. The US financial system has also been banned from
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