Select Page

The U.S. Treasury Department on Monday placed sanctions against crypto mixing service Tornado Cash, citing its use by the North Korea-backed Lazarus Group in the high-profile hacks of Ethereum bridges to launder and cash out the ill-gotten money.

Tornado Cash, which allows users to move cryptocurrency assets between accounts by obfuscating their origin and destination, is estimated to have been used to launder more than $7.6 billion worth of virtual assets since its creation in 2019, the department said.

Thefts, hacks, and fraud account for $1.54 billion of the total assets sent through the mixer, according to blockchain analytics firm Elliptic.

Crypto mixing is akin to shuffling digital currencies through a black box, blending a certain quantity of cryptocurrency in private pools before transferring it to its designated receivers for a fee. The aim is to make transactions anonymous and difficult to trace.

“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 E. Nelson, under secretary of the Treasury for terrorism and financial intelligence, said.

images from Hacker News