The US government announced on Monday August 8 that it had placed Tornado Cash, a “mixer” for anonymizing cryptocurrency transactions, on its list of companies sanctioned for money laundering. US citizens are now prohibited from using the service, owning accounts on it, or otherwise engaging with the company, including providing services to it.
According to US intelligence, since its inception in February 2021, Tornado Cash has been used by different criminal groups to launder approximately $7 billion (about 6.80 billion euros) of stolen funds. About 455 million dollars (444 million euros) stolen by the Lazarus group, linked, according to the United States and the majority of experts, to North Korea, notably passed through Tornado Cash.
“Despite publicly claiming otherwise, Tornado Cash has repeatedly failed to impose effective controls” against money laundering, Treasury Department spokesman Brian Nelson said in a statement.
Very disrupted service
Money transfers in cryptocurrencies can be partly anonymous, but are always traceable – the very principle of these virtual currencies is based on the existence of a public ledger of all transactions. Mixers like Tornado Cash make it possible to significantly blur the lines on the origin and destination of a transfer. Services of this type are very popular with cybercriminals, especially ransomware gangs.
These sanctions against Tornado Cash have already had concrete consequences. The site experienced major malfunctions on August 9, apparently linked to the blocking of some of its tools hosted by the GitHub service. Unsurprisingly, the price of the cryptocurrency launched by the company also crashed, losing more than 30% of its value in a few hours.