The U.S. Department of Treasury ’s Office of Foreign Assets Control (OFAC) sanctioned crypto mixer Tornado Cash saying it laundered more than $7 billion of cybercrime proceeds since its creation in 2019. Crypto asset mixers are designed to obscure funds trails by blending someone’s tokens with a pool of other individuals’ assets on the platform. The U.S. government says Tornado Cash fosters illicit activity. The Tornado Cash website is offline!
Tornado Cash was used in some high-profile crypto heists this year, including the $615 million theft of tokens from Ronin, a network supporting the nonfungible token game Axie Infinity, and a $100 million attack on U.S. startup Harmony. Both were linked by security researchers with the North Korean state-backed hacking collective Lazarus Group. Blockchain analytics firm Elliptic claims that at least $1.5 billion in proceeds from crimes such as ransomware, hacks, and fraud have been laundered through Tornado Cash.
“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,” Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson said in a statement.
The actions against Tornado Cash follow sanctions similarly imposed in May 2022 on crypto mixer Blender.io.
“The United States will continue to pursue actions against mixers laundering virtual currency for criminals and those who assist them,” said Antony J. Blinken, Secretary of State.
As a result, all property and interests in the property of Tornado Cash in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.
