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Tornado Cash sanctioned in the US for money laundering

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The cryptocurrency mixer TornadoCash has been sanctioned by the US Treasury Department for being used by North Koreans to launder money. According to him press release, cybercriminals have used the platform to launder more than $7 billion worth of cryptocurrencies. North Korea’s Lazarus group, which has made headlines for several high-profile attacks, used the exchange to launder around $455 million. This money was used to finance the recent attack on Harmony Bridge.

According to Elliptic, a blockchain analytics platform, Tornado Cash has earned an estimated $1.5 billion generated from criminal activity. The Treasury Department also stated that during the Nomad heist, hackers used the platform to launder $7.8 million worth of cryptocurrency. the lazarus group stole $625 million from Ronin Networkan online sidechain.

Brian Nelson, the Under Secretary for Financial Intelligence, said the platform has failed to implement effective controls that make it possible for hackers to use it to launder money. He also mentioned that some of these crimes were committed against American victims.

Tornado Cash and other mixers used heavily by North Korean hackers

The agency noted;

Despite public assurances to the contrary, Tornado Cash has repeatedly failed to impose effective controls designed to prevent it from regularly laundering funds for malicious cyber actors without basic measures to address its risks. The US Treasury will continue to crack down on mixers who launder virtual currency for criminals and those who assist them.

TRM Labs researchers have also stated that the North Koreans have taken advantage of the platform’s poor control implementation to move $1 billion of stolen funds.

Over the years, the US government has renewed its commitment to fighting money laundering on social media platforms. The sanction against Tornado Cash is a reflection of his effort against this act.

Digital asset mixers are believed to be a tool used by criminals to hide traces of stolen funds. This was used by cybercriminals based in North Korea to attack the hack Axie Infinity.

According to Ari Redbord, legal and government affairs expert at TRM Labs, sanctions could play a huge role in determining whether the use of mixers is «acceptable to launder illicit funds.»

Redbord mentioned that North Korea is a cash-poor country. Due to its lack of export earnings, it is at high risk of a financial crisis. For this reason, they resort to hacking activities to finance their activities.

Over the past year, we have moved from a post-9/11 world to a new digital battlefield. Nation-state actors know they must go after crypto companies to finance the proliferation of real weapons. It’s not just some hackers trying to fund a lifestyle.



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