The US Treasury Department has blacklisted 40 cryptocurrency addresses allegedly linked to controversial mixer Tornado Cash. The department listed the crypto addresses on the specially designated list of the Office of Foreign Asset Control (OFAC). The protocol suffered some recent cyber attacks after the North Korea-affiliated Lazarus Group allegedly stole $455 million.
OFAC has also blocked U.S residents from using Tornado Cash after placing 44 Ether (ETH) and USD Coin (USDC) addresses linked to the mixer on its list of Specially Designated Nationals.
Tornado Cash Berated For Aiding Criminal Transactions
According to the department, some businesses and individuals laundered over $7 billion worth of crypto assets with the mixer since 2019. This is in addition to the fund stolen by the North Korean-backed Lazarus Group. Tornado Cash has suffered recent hacking incidences, including the $100 million hack on Horizon Bridge in June and the $375 million attack on Wormhole earlier the February.
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Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian Nelson commented on the situation. He noted that Tornado Cash, despite the public assurances of improved security, has failed to maintain regular controls that will prevent the laundering of funds through the platform. He added that the platform has become the channel through which threat actors launder funds but has not made any serious efforts to address the situation.
Nelson added that Treasury will continue its aggressive monitoring and sanctions against mixers that assist fraudsters and threat actors to steal digital assets.
Tornado Cash’s Security Measures Not Enough
In May, the Treasury Department also took a similar decision against crypto mixer Blender.io. OFAC stated that the Mixer allegedly processed part of the $620 million stolen from play-to-earn game Axie Infinity’s Ronin Bridge. OFAC said the platform processed 25.5 million USDC and 173,600 ETH, both worth about $20.5 million. As a result, OFAC sanctioned the platform and prevented U.S. residents from dealing with them.
Last month, Tornado Cash announced that it had open-sourced its user interface code as its plan to ensure complete transparency and decentralization of the platform. The mixer said its platform now has a compliance tool that ensures that users show the source of their transactions. But despite these approaches, the Treasury Department believes that Tornado Cash is not doing enough to prevent fraudulent activities via the platform.
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