The U.S. Treasury Department today sanctioned Tornado Cash, an Ethereum coin mixing tool.
In a Monday announcement, the body added the Tornado Cash website and a long list of Ethereum addresses to its Specially Designated Nationals list, banning American citizens from using the tool or transacting with these addresses.
Tornado Cash is an app that lets users make private transactions on the Ethereum network. It does this by pooling together cryptocurrency deposited by many users and mixing them so transactions are obscured.
The Treasury Department’s announcement listed a number of Ethereum addresses linked to the Tornado Cash community, including addresses where people could donate funds. According to Nansen researcher Andrew Thurman, the list of banned addresses even includes one belonging to Gitcoin, an Ethereum-based funding platform for open-source projects.
The Treasury Department said it took these measures because criminals had used Tornado Cash to launder money. “Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Tornado Cash, which has been used to launder more than $7 billion worth of virtual currency since its creation in 2019,” the statement read.
The announcement added that Lazarus Group, a North Korean state-sponsored hacking group, used Tornado Cash to launder over $96 million after it hacked Harmony Bridge in June.
It also said that criminals used Tornado Cash to launder $7.8 million stolen in last week’s Nomad Bridge hack.
In April, Tornado Cash said it used a tool from blockchain tracking firm Chainalysis to prevent addresses sanctioned by the U.S. government from using the privacy app.
This evidently wasn’t good enough for U.S. authorities. Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson added: “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.”
Ethereum is the network behind the second-biggest cryptocurrency by market cap, and thousands of tokens run on its blockchain. Its native coin, ETH, currently trades for just under $1,800 and has a market cap of over $219 billion.
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Source: https://decrypt.co/106986/treasury-blacklists-bans-tornado-cash-ethereum-mixer
