The United States sanctions Tornado Cash, which has been widely used to launder cryptocurrency. They are regularly being used by criminals and hackers to hide the source of funds. Tornado cash is a mixer that helps in hiding the actual path of crypto transactions on the blockchain. When the platform is used, it uses more crypto funds to mix transactions such that it will be difficult or almost impossible to track the real trajectory of the funds. Even though the main idea of using a mixer is to maintain privacy, in recent times, money laundering has become of its main applications.
The United States sanctions Tornado Cash
The citizens in the United States will now be prohibited from using Tornado Cash as the Office of Foreign Asset Control sanctions it. This is great as reports from the Treasury show that the platform has been used to launder more than $7 billion in cryptocurrency since 2019. That makes it clear why the US authorities had to step forward and take a struct step against it.
Tornado cash has also become the go-to mixer for hiding the source of hacked funds and fraud. This makes it easy for the criminals to use the crypto or cash them out without getting caught. Some of the popular hacks that have been laundered with the help of Tornado cash are $445 million by the Lazarus group, which is involved with North Korea. There is also the recent hack of $100 million from Harmony’s bridge.
Tornado cash has failed to implement tools and controls that make money laundering impossible on their platform. They cannot stay in the market claiming to protect user privacy while criminals use their platform to launder money. So, we can expect more strict actions from the US treasury against other mixers that are still operational in the country.
This isn’t the first time
The United States authorities are busting mixers from time to time. They sanctioned another popular one a few months back in May. It was called Blender.io, which was also used by the Lazarus group after a major hack in Axie infinity. At the time, Tornado cash pulled through and wasn’t sanctioned, but now they have been as well.
What are your thoughts on the United States as it sanctions Tornado Cash? And do you think this will help reduce money laundering in crypto? Let us know in the comments below. And, if you found our content informative, do share it with your friends.