The Office of Foreign Assets Control (OFAC), a division of the US Department of the Treasury, has imposed sanctions on the decentralized mixer service Tornado Cash.
Authorities say more than $7 billion in total was laundered through Tornado Cash, which was created in 2019, and its operators have been unable or unwilling to put in place “effective controls designed to prevent money laundering on a regular basis.”
For example, it is reported that North Korean hackers from the Lazarus group actively used this mixer for their operations. So, funds stolen by hackers as a result of the Harmony hack (about $96 million) passed through Tornado Cash, funds received as a result of the compromise of the Ronin blockchain, which is closely related to the popular NFT game Axie Infinity (more than $600 million was stolen, 455 million), as well as about $7.8 million received during the recent compromise of the Nomad cryptocurrency bridge.
In addition, this mixer is reported to have been used by other criminals to make it difficult to trace stolen funds. Including: after the hacking of the Audius music blockchain platform, the Beanstalk DeFi platform, the Uniswap decentralized exchange, and the Arbix Finance exit scam.
Now, in accordance with the sanctions, all property and property interests of Tornado Cash (located in the United States or owned or controlled by persons from the United States) have been blocked and must be reported to OFAC. Also, US citizens and other persons in the United States may no longer do business with Tornado Cash without special permission from OFAC. In addition, any organizations that are directly or indirectly owned by such people by 50 percent or more will also be “banned”.
Let me remind you that in the spring of this year, the US authorities imposed similar sanctions on the Blender[.]io cryptocurrency mixer. According to the authorities, this service was also used by hackers from North Korea to launder money.