Crypto Mixing Service: Blacklist: US Treasury Bans Any Interaction With Tornado Cash | news

• Tornado Cash has been placed on the US Specially Designated Nationals List

• Any transaction related to the Platform is prohibited in the United States

• The possibilities for data protection are also limited by the ban

“Today, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Tornado Cash, which has laundered more than $7 billion worth of various virtual currencies since its inception in 2019 — including over $455 million from the North Korean-backed Lazarus Group,” announced the US Treasury Department in a press release on August 8.

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Tornado Cash used in several major money laundering hacks

The Lazarus Group is said to be behind the 625 million ronin hack that was discovered in March and laundered much of the stolen crypto via Tornado Cash. With the mixing service, customers transfer their cryptocurrencies to a shared Tornado pool and can then withdraw cryptocurrencies from this pool in the paid-in value. This is to ensure that transactions cannot be traced and data protection is guaranteed. While non-fraudulent users also use the open source platform, about $1.5 billion was laundered from the Crypto.com hack at Tornado Cash, according to crypto-analysis firm Elliptic, and its trail, according to the US Treasury Department, stolen equipment from Harmony Bro and Nomadebro in this way.

The US wants to take stronger action against money laundering through blending services

“These hacks are more than just hacks, they pose a serious threat to national security. It’s not just about money laundering – it’s about money laundering that will be used to distribute weapons,” says Ari Redbord of the research firm TRM Labs for CoinDesk. The US Treasury Department hopes that banning the platform for these illegal activities will reduce money laundering – just a few months ago, another, smaller blending platform, Blending.io, was blocked.

A ban on Blending.io and Tornado Cash will not remain the case: “The United States will continue to act against mixers that launder digital currencies for criminals or support them in doing so,” Secretary of State Anthony Blinken said in a press release from the US Treasury Department statements.

What does the ban mean for privacy in the US?

Specifically, Tornado Cash’s blacklisting means that no one in the US will be allowed to conduct transactions related to the platform – violators face a penalty. While most naturally support the ministry’s decision to crack down on money laundering, experts are talking about what the ban on mixing services means for privacy. It raises the question of why the government isn’t targeting fraudsters instead of making it harder for people acting legally to protect their data. Coin Center, a non-profit organization in the field of crypto regulation, puts it in an article as follows: “This is the sanctioning of an inherently neutral tool that, like any other technology, can be used for good and bad purposes.”

It remains to be seen what impact the ban will actually have on money laundering and data protection in general.

Olga Rogler / Editor finanzen.net

Image Credits: BeeBright / Shutterstock.com, Wit Olszewski / Shutterstock.com

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