U.S blacklists crypto Mixer Tornado Cash, here’s why!
Announcement Of The Sanctions
Today, the U.S Treasury Department has announced that it is sanctioning the crypto-mixing service, Tornado Cash. These sanctions mean that all U.S citizens, and those subject to U.S jurisdiction are prohibited from using the service.
It’s been reported that 44 crypto wallets linked to Tornado Cash were seized as part of the sanction. Although Tornado Cash has previously made efforts to comply with regulatory obligations of the law, the U.S Treasury stated, “Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks,“
“Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them.“
Reason For The Sanctions
The Treasury Department reported that the reason they had decided to officially sanction this crypto mixer is because the platform has helped to launder more than $7 billion worth of Crypto since 2019.
Officials added in their announcement that the Lazarus Group, a North Korean hacking group that was responsible for more than $625 million to be stolen from the Axie Infinity’s Ronin Network hack back in March, had used Tornado Cash to launder a lot of that stolen money.
The latest crypto crime that sealed the decision to sanction the crypto mixer Tornado Cash was reported to be the Nomad Bridge hack that took place just earlier this month. Tornado Cash was also reported to have been used to launder around $7 million stolen assets from this hack.
Because of all these events, officials have officially decided to blacklist the platform from being used by U.S citizens in hope to reduce the amount of crypto theft related cyber crimes.
Complaints From The Community
Coin Center statement on Tornado Cash:
U.S. Treasury sanction of privacy tools places sweeping restrictions on all Americans. Sanctioned Tornado Cash smart contract is a tool, not a person.https://t.co/9t2Vtzp8z5 pic.twitter.com/x5aS9iHfRI
— Neeraj K. Agrawal (@NeerajKA) August 8, 2022
Despite this, many in the community have voiced their disagreement on the sanctions, claiming that this will not affect the rate of crypto thefts happening.
Many in the crypto community have defended the platform Tornado Cash, stating their views that the mixer is mostly used as a tool to keep data and information private, and that this sanction places restrictions on Americans’ freedom for privacy.
Completely legal (until today) reasons to use tornado cash
– you get paid in crypto and don’t want your employer knowing all ur financial details
– you pay for a service in eth and don’t want them to be able to see everything you’ve ever done onchain
— reza (@RezaJafery) August 8, 2022