The US Treasury Department has banned an Ethereum coin mixing tool, Tornado Cash. The body stated that Tornado Cash and the long list of Ethereum addresses had been banned for all American citizens. No US citizen can use this tool or make transactions with these addresses.
Tornado Cash is a DApp that lets you make private transactions on the Ethereum mainnet. It pools together crypto assets deposited by multiple users and mixes those assets to make the transactions obscured.
As The Treasury Department made the announcement about that ban, they listed a long list of addresses linked to the Tornado Cash community. They also included addresses where users could donate crypto assets.
Nansen researcher Andrew Thurman stated that the list of banned addresses also included the one that received crypto funds from Gitcoin. Based on Ethereum, Gitcoin is a funding platform for open-source projects.
Why FEDs Banned Tornado Cash?
The US Treasury Department said that they had to ban the app as criminals were using it to launder money in the form of crypto assets.
“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,” read the statement.
The Department added concerns about the notorious North Korean hacker group and how it used Tornado Cash to launder over $96 million worth of cryptocurrencies. Lazarus Group also took responsibility for the Harmony Bridge hack in June.
Criminals used Tornado Cash to launder $7.8 million that was stolen last week in the Nomad Bridge hack.
“Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks,” added Brian E. Nelson (Under Secretary of the Treasury for Terrorism and Financial Intelligence)
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