is under US sanctions

Hacken Ecosystem
10 Aug, 2022
2 Minutes Read

Tornado Cash, one of the most popular crypto mixers, was added to the US sanctions list. The service came under sanctions because the authorities accuse the platform of having laundered about $7 billion through it since 2019. This amount also includes about $450 million stolen by the Lazarus Group, a North Korean-sponsored hacker group.

On August 8, 2022, Tornado Cash and all the Ethereum wallet addresses associated with Tornado Cash and its smart contracts were added to OFAC’s SDN List. The sanction resulted in $437m of assets being blocked.

All of Tornado Cash is blocked (can’t be used by US citizens), including their Gitcoin grants wallet. All of their addresses worth $437m in stablecoins, ETH, and WBTC are blocked too. It is also reported that the account of the platform’s co-founder, Roman Semenov, was blocked on GitHub.

The full list of Tornado Cash resources that were banned

It’s also necessary to add that token TORN lost 50% of its value in just two days after Aug 8.

Why was it banned?

Money laundering is the main reason for sanctioning Tornado Cash. The US government found that North Korean hackers used the mixer to flee with funds. Services like Tornado Cash are called cryptocurrency tumblers. Their purpose is to improve TX privacy. Crypto Tumblers hide the history of TX. Alternatively, anyone would see TX details on a block explorer like Etherscan. Tumblers work by breaking the on-chain link between source and destination addresses. Many hackers have moved funds using Tornado Cash, including the most recent Nomand Bridge Exploit.

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