Security expert slams U.S. decision to ban Tornado Cash

The U.S. Department of Treasury banned it on August 8 to prevent North Korean criminals from stealing money, because of the fact that the Torando Cash TORN was the first smart contract to be sanctioned by the U.S. government.

CommerceBlock s privacy pioneer Nicholas Gregory commented on this decision and told CryptoSlate that it is pointless when it comes to combating cybercrime.

No one can prevent people from using mixer smart contracts or forking the existing ones because of the ban on Tornado Cash. It does not hinder cybercrime or privacy. What if someone outside the U.S. mixes their funds through Tornado and then puts them up on Uni swap? I go in and get those dirty tokens from Uni swap. Is it possible to break the U.S. law now? The ban was announced by the U.S. Department of Treasury by posting a list of 39Ethereum and six USDC addresses associated with Tornado Cash. The Office of Foreign Asset Control OFAC added 45 addresses to its SDN list of Specially Designated Nationals and Blocked Persons. The ban applies to all American citizens and companies.

The research company CoinCenter released a statement about the Tornado Cash ban and expressed their concerns about the liberty violations against U.S. citizens.

The statement stated that the sanction is not directed towards one person or entity, but rather towards a neutral technology. It can be used for good and evil like any other technology. The statement said that this sanction targets:

Gregory stated that the decision doesn't make sense because it doesn't hinder privacy or prevent crime. He said something.

He stated that the ban is critical because it is the first smart contract that has been banned by any government.

Cryptocurrency mixers like Tornado Cash give extra privacy to users who want to transfer their funds. In its simplest sense, mixer protocols collect funds, mix them and send them to their respective receiving wallet addresses. It becomes impossible to match the sending and receiving addresses.

This feature is always appreciated, but it also attracts cybercriminals. In July 2022, a recent study by Chainalysis showed that the usage of cryptocurrencies mixers reached a new all-time high of $51.8 million.

The popularity of Tornado Cash has been one of the most popular choices amongst hackers. Attackers of Axie Infinity's Ronin Bridge, North Korea's Lazarus Group, As well as Inverse Finance s, Beanstalk s, and Deus DAO's attackers have been associated with the Tornado Cash.

The report also shows that criminal organizations with known affiliations to North Korea only laundered around $600 million using criptomix in the second quarter of 2022.

A Treasury Department spokeswoman told Coindesk that the department is working with the FBI to investigate the Lazarus Group in April 2022. The spokesman said there were upcoming sanctions that might have included the mixer Tornado Cash.