US authorities ban Tornado Cash crypto mixer
Also sanctioned were 39 Ethereum and 6 USDC addresses related to it
09.08.2022 - 06:40
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What’s new? On August 8, the US Office of Foreign Assets Control (OFAC), part of the Treasury Department, added crypto mixing service Tornado Cash to its sanctions list. Also under the authorities’ restrictions fell 39 Ethereum and 6 USDC addresses related to it. Restrictions mean a complete ban on the service’s use in the United States. According to OFAC, more than $7 billion in total has been laundered using Tornado Cash since its inception in 2019.
How did events develop? After blocking, Tornado Cash was removed from the GitHub hosting service. And according to aggregator Dune Analytics, Circle, the issuer of the USDC stablecoin, froze more than 75 000 coins associated with the sanctioned mixer addresses.
According to OFAC, hackers from the North Korean Lazarus Group used the service. In March, according to the authorities, hackers from the DPRK attacked the Ronin Network sidechain, stealing $625 million in cryptocurrency. The US Treasury Department and the Federal Bureau of Investigation (FBI) were involved in investigating the incident. Then, authorities put the wallet that held some of the stolen funds on the sanctions list.
The service fell under restrictions, even though it blocked the addresses of Ronin hackers back in April. Back then, the service’s representatives said they were tracking all the addresses under US sanctions to block them.
Lazarus could also be involved in the June 24 hack of the Horizon bridge on the Harmony network, analysts at Elliptic speculated. As a result of the exploit, the hackers managed to withdraw $100 million in cryptocurrency. After that, they exchanged the cryptocurrency on the Uniswap exchange and sent it to Tornado Cash. The developers of the project launched an investigation into the incident jointly with the FBI.
What is known about Tornado Cash? It is a non-custodial protocol for anonymous transactions. The goal of the decentralized platform is to ensure the privacy of transfers by interrupting the standard chain between the sender and recipient addresses.
For more details on what are crypto mixers and how they work, see GetBlock Magazine’s feature.
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