Tornado Cash Has Been Sanctioned By The US Treasury For Allegedly Laundering Stolen Cryptocurrency!
The United States of America has imposed several sanctions on Tornado Cash’s crypto protocol in the past few days.
The virtual currency mixer allows hackers to launder millions and billions of dollars they steal from several other protocols.
Tornado Cash Has Been Sanctioned By The US Treasury For Allegedly Laundering Stolen Cryptocurrency
According to the senior official at the US treasury, Tornado Cash is quite problematic. They believe that platform had failed to fulfill the purpose for which it was built. It is mostly now used for laundering money from different malicious elements.
Tumblers have widely known for maintaining privacy and allowing people to send money without revealing their identities as anonymous people. But they are now being used to launder money through crypto, as it is quite difficult to track the trail of transactions.
- The platform has been accused of supporting hackers to launder 7 Billion USD worth of crypto tokens.
- Roman Semenov’s Account was suspended, and the social media channels of Tornado Cash, like Github and the website, went down.
- Tornado Cash has played a key role for a North Korean hacking group (Lazarus Group).
What Is Tornado Cash?
A tornado Cash is a mixer or a number that allows cryptocurrency traders to mix their identified funds with others to prevent a trail from its organization. A lot of funds are pooled in the crypto mixer that is kept in the protocol for a small duration of time, and Further, it is distributed back to the destination addresses at regular intervals.
Earlier, Blender.io ( a much smaller protocol than tornado cash) was sanctioned. When considering North Korea specifically, Tornado Cash has been a great tool for mixing the funds. The OFAC says that sanction is not only because of the money laundering but also the use of this laundered money to buy and manufacture weapons.
A lot of Cash in the Tornado is not from only illegal activities, but also there are some users who use it for a real use case. US government has constantly informed citizens that crypto mixers might aid in illegal activity or be illegal to use.
US Sanctions Won’t Stop Tornado Cash From Being Used
Although there have been some sanctions imposed on Tornado Cash, there is no chance that it will completely be halted. Roman Semenov (Cofounder Tornado Cash) had further told that it is architected so that no central authority can control it. But there is a DAO, which approves any change that has to be made in code. Tornado cash is designed in such a way that it won’t stop because there is no third party to control it. It would be the same as controlling bitcoin or Ethereum.
Tornado Cash, source code is completely open-source that allows anyone to make use of it to build an interesting application on top of it. Tornado cash is non-custodial means that users have complete control over their funds all the time.