Tornado Cash was banned for facilitating money laundering

(Daniel Kostecki – Conotoxia)

On Monday, U.S. Secretary of State Antony Blinken tweeted about sanctioning the Tornado Cash cryptocurrency, which he called a “state-sponsored hacking group, used by the DPRK to launder money.”

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The Secretary’s statement went viral due to his bold allegations about the project’s founders. Just a little over an hour later, he deleted the post, replacing it with the more reserved information that Tornado Cash was simply “used by DPRK-linked hacking groups.” Blinken made no reference in the new entry to the one removed an hour earlier.

The posts were related to an ongoing investigation by the Treasury Department’s Office of Foreign Asset Control (OFAC) into money laundering. The token in question was blacklisted, providing the ability to cover up traces of cryptocurrency transfers and thus increase the level of privacy of transactions.

Currently, 40 Ethereum and USDC addresses linked to the project’s activities have been identified. According to the agency, the Tornado Cash solution was used by the Lazarus Group, a DPRK hacking group that moved out $625 million in cryptocurrencies stolen in hacking attacks in recent years.

The project has been blacklisted by the US Treasury. This means a complete ban on the use of the token and related addresses by Americans. Blender.io, another project that enhances the privacy of transactions, was also shut off earlier.

“Tornado Cash has been the go-to mixer for cybercriminals looking to launder the proceeds of crime, as well as helping to enable hackers, including those currently under U.S. sanctions, to launder the proceeds of their cybercrimes by covering up the origin and transfer of this illicit virtual currency” – The senior Treasury official said. He then added, “Since its creation back in 2019, Tornado Cash has reportedly laundered more than $7 billion worth of virtual currency,”. Tornado Cash (TORN) has lost nearly 28% in the last 24 hours, according to CoinGecko.

Hackers return funds and recommend more caution for nomad

Less than a month after ignoring warnings from audit firm Quantstamp, an exploit in the Nomad protocol was discovered and used to move out more than $190 million. The entire operation took less than three hours. White hat hackers quickly joined the thieves in an effort to seize as much of the money as possible and protect users’ funds from real criminals.

Within hours of publishing a wallet to which Nomad accepts the return of stolen funds, the white hacking group returned $32.6 million of the stolen $190 million. Most of the funds were denominated in USD Coin (USDC), Tether (USDT) and Frax. Unfortunately, it is still unclear how much money they managed to protect from the stolen 190 million. Nomad expects further returns.

Bitcoin, along with Ethereum, is deteriorating after recent increases. Some tokens are experiencing minimal losses. On the Conotoxia MT5 platform, BTC is losing 1.5%, and ETH is losing 1.9% as of 11:30 GMT+3.

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