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Ethereum-Based Mixer Tornado Cash Sanctioned by U.S. Government

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Alex Dovbnya

The action has prohibited U.S. investors from interacting with the controversial service

Popular Ethereum-based coin mixing service Tornado Cash has been sanctioned by the U.S. Department of Treasury, according to a Monday announcement. A slew of associated cryptocurrency addresses have been also added to the blacklist.  

The move shows that American authorities are determined to go after different parts of the crypto supply chain that are used for nefarious activities.

In May, the U.S. government sanctioned Blender, another coin mixing service, for allegedly helping North Korea launder some of the funds stolen from Axie Infinity.

Coin mixing services are used for obscuring the origin of particular transactions, which makes them a hotbed for money laundering.

After gaining significant popularity, the decentralized coin mixer became the go-to tool for covering the tracks of nefarious actors.
In March, one of the founders of Tornado Cash opined that it was “technically impossible” to enforce sanctions against the controversial coin mixer.

According to U.S. officials, more than $7 billion worth of digital assets has been laundered with the help of Tornado Cash since 2019. The mixing service was used by Lazarus Group, a North Korea-run hacking collective, for laundering hundreds of millions of dollars worth of funds pilfered from Axie Infinity, Harmony, and Nomad earlier this year. 

Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson claims that Tordano Cash hasn’t prevented cyber actors with efficient controls in a statement.  

In April, Tornado Cash announced that it had blocked crypto addresses sanctioned by the U.S. government from its frontend. 

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