The U.S. Treasury Department announced on Monday that it is sanctioning an Ethereum coin mixing tool, Tornado Cash, saying it is used by criminals to launder money.
In a statement released on Monday, the department said that it had added the Tornado Cash website and a long list of Ethereum addresses to its list of “Specially Designated Nationals.” This means that Americans can’t use this app or do business with these addresses.
Tornado Cash to launder money
Tornado Cash is an app that lets people use the Ethereum network to send and receive money privately. It does this by putting the cryptocurrency that many users deposit together and mixing it up so that transactions are hard to track.
“Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Tornado Cash, which has been used to launder more than $7 billion worth of virtual currency since its creation in 2019,” the statement read.
It added that the Lazarus Group, a cybercriminal group, used Tornado Cash when they stole over $455 million.
It also said that cybercriminals used the app to launder more than $96 million during the Harmony Bridge Heist on June 24, 2022, and around $8 million Nomad Heist on August 2, 2022.
Failure to impose controls
The Treasury Department’s notice included a list of Ethereum addresses associated with the Tornado Cash network, along with donation addresses.
He added that the Department will remain to pursue aggressively against mixer apps and tools that launder cryptocurrencies “for criminals and those who assist them.”
The announcement also added that the move is initiated in adherence to Executive Order (E.O.) 13694, as amended, and follows OFAC’s May 6, 2022 virtual currency mixer Blender.io (Blender) designation.