Home Technology Crypto ‘Mixer’ Tornado Cash Is Blacklisted By The Treasury Department

Crypto ‘Mixer’ Tornado Cash Is Blacklisted By The Treasury Department

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Crypto ‘Mixer’ Tornado Cash Is Blacklisted By The Treasury Department

The Treasury Department on Monday prohibited Americans use cryptocurrency platform Tornado Cash, claiming the service has helped criminals launder more than $7 billion worth of virtual currency.

The crackdown was the latest effort by the US government to rein in the crypto industry, as lawmakers and regulators grow increasingly concerned about the volatility of virtual currencies and their role in facilitating hacking and other crimes. . Calling the platform a “threat to the national security of the United States,” the Treasury Department placed Tornado Cash on an entity blacklist, making it illegal for Americans to send or receive money using the service.

“Despite public assurances to the contrary, Tornado Cash has repeatedly failed to impose effective controls intended to prevent it from laundering funds to malicious cyberactors,” Brian Nelson, undersecretary for terrorism and financial intelligence, said in a statement. a statement.

Criminals have long used virtual currencies to conduct anonymous transactions, exchanging digital coins for drugs or other illicit goods. But the anonymity of crypto doesn’t offer complete security: Crypto transactions are recorded on publicly accessible ledgers called blockchains, allowing law enforcement officials to track the money.

Platforms like Tornado Cash are designed to make this type of tracking more difficult. These cryptographic “mixers” receive multiple transaction streams and then combine them to mask the origin and destination of funds. According to the Treasury Department, Tornado Cash has been used to launder more than $455 million in stolen crypto this year by North Korean-backed hackers called the Lazarus Group.

A message on the official Tornado Cash Twitter account was not returned. Roman Semenov, one of the company’s three founders, did not respond to a request for comment.

Since its launch in 2019, Tornado Cash has risen to prominence largely because blockchain records show hackers using it to move stolen cryptocurrency. In interviewsMr Semenov defended the service, saying the software protects the privacy of legitimate crypto traders who could be targeted by kidnappers or thieves.

In a statement, crypto advocacy group Coin Center critical the Treasury Department’s announcement, arguing that Tornado Cash is a neutral platform “that can be used for good or bad like any other technology.”

“It is not a particular bad actor who is sanctioned,” the statement read. “Instead, it’s all Americans who want to use this automated tool to protect their own privacy when transacting online.”

As the market for digital currencies has grown, the federal government has increasingly cracked down on crypto companies, which are loosely regulated. Attacheda stablecoin company, was a fine last year by the Commodity Futures Trading Commission for misrepresentation of its reservations, while the Department of Justice sued insider trading fee last month against a former employee of Coinbase, the largest US crypto exchange.

Cryptocurrency exchange Kraken is also under investigation by the Treasury Department for possible violations of US sanctions.

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