US imposes sanctions on virtual currency mixer Tornado Cash

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US imposes sanctions on virtual currency mixer Tornado Cash

The United States imposed sanctions on the virtual currency mixer Tornado Cash on Monday, accusing it of helping hackers, including from North Korea, to launder proceeds from their cyber crimes.

A tumbler service is a company that combines different monies, including possibly traceable or tainted money, to obscure the trail back to the fund's original source.

A Treasury Department official said that Tornado Cash, one of the largest mixers identified as problematic by the Treasury, has reportedly laundered more than $7 billion of virtual currency since it was created in 2019.

Monday's move freezes any US assets of the mixer and prevents Americans from dealing with it.

The Treasury said that the Lazarus Group, a well-known North Korean government backed hacking group that has conducted numerous data breaches, both politically and sometimes financially motivated, has laundered $455 million through Tornado Cash.

The Lazarus Group is already under US sanctions. The group has had a number of significant data breaches historically, including an intrusion into Sony Pictures in late 2014.

US and South Korea officials say that North Korea controls thousands of hackers that steal funds, including cryptocurrencies, to finance its weapons programs.

The North Korean mission to the United Nations in New York did not respond to requests for comment.

The Treasury said that the company that has used Tornado Cash to launder about $100 million from a hack into Harmony in June and as recently as last week in the theft of Nomad.

The Treasury official said that despite prior requests for Tornado Cash to make changes, the criminal activity continued, leading to the decision to designate the mixer.

In May, the US Treasury targeted Blender, a mixer that pools and scrambles cryptocurrencies from thousands of addresses, imposing sanctions for the first time in a single month.

Hackers have plagued criptocurrency platforms for a long time. Tornado Cash has played a role in these crimes, according to experts.

Dr Tom Robinson, co-founder of Elliptic, said that Tornado is a popular tool for cybercriminals and state-backed hacking groups. Elliptic said that at least 1.3 billion dollars of proceeds of crime, such as ransomware, hacks and fraud, have been laundered through Tornado Cash.