U.S. Treasury Sanctions Tornado Cash Over Billions in Crypto Laundering
The U.S. Treasury prohibits citizens from using Ethereum mixer Tornado Cash after it processes billions in illicit funds. The platform reportedly launders stolen crypto for North Korean hackers and other cybercriminals.
The U.S. Treasury officially sanctions decentralized cryptocurrency mixer Tornado Cash for enabling billions of dollars in laundered funds. The Office of Foreign Asset Control (OFAC) immediately prohibits all American citizens and businesses from using the service, which obscures the source and destination of crypto transactions on the Ethereum network.
Since its creation in 2019, Tornado Cash processes over $7 billion in virtual currency, including at least $1.5 billion in direct proceeds from crimes like ransomware and fraud. Notably, the platform launders $445 million stolen by the North Korean-backed Lazarus Group, which uses stolen cryptocurrency to fund the country's nuclear weapons program.
The Treasury points out that Tornado Cash also launders millions from recent high-profile heists, including $7.8 million from last week's Nomad bridge exploit. Despite claiming to operate for legitimate financial privacy, the government states the platform repeatedly fails to implement basic controls to stop malicious cyber actors from washing stolen assets through its system.