Table of Contents
- US Government banned Tornado Cash
- What is Tornado Cash?
- How Tornado Cash was used for illegal activities?
- What experts say?
US Government banned Tornado Cash
The department of U.S. Treasury banned using of a well-known crypto-mixing service Tornado Cash, alleging that it poses a national security risk because of its role in Korean hackers' laundering of stolen crypto funds. Tornado cash has been a key tool for the Lazarus Group, a North Korean hacking group tied to the $625 million March hack of Axie Infinity’s Ronin Network, according to the Treasury Department. It also said that criminals used Tornado Cash to launder $7.8 million stolen in Nomad Bridge hack last week.
A senior department official said that 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, Since its creation back in 2019.
What is Tornado Cash?
Tornado Cash is a non-custodial fully decentralized protocol that allows private transactions in the crypto-space.
Tornado Cash improves transaction privacy by breaking the on-chain link between source and destination addresses. It uses a smart contract that accepts ETH deposits that can be withdrawn by a different address. To preserve privacy a relayer can be used to withdraw to an address with no ETH balance. Whenever ETH is withdrawn by the new address, there is no way to link the withdrawal to the deposit, ensuring complete privacy. It improves transaction anonymity by breaking the on-chain connection between the recipient and destination addresses. It uses a smart contract that takes deposits from ETH, which can be withdrawn from another address.
Ethereum-based mixer worth Tornado Cash's privacy pool recorded an all-time high, hitting over $13 million on November 11, according to data collected by The Block. The non-custodial privacy service has risen almost 7,700 percent year-to-date from $174,000 to $13.44 million.
How Tornado Cash was used for illegal activities?
Mixing of cryptocurrency uses a bunch of cryptocurrencies to complicate the tracking of electronic transactions and has become a common service used by cybercriminals.
In addition, it has become a prevalent tool for them to look for additional anonymity to slow down investigators and keep their identities private. Therefore, it is used to launder funds, especially those stolen during significant heists. While most virtual currency activity is not forbidden, it can be used for illicit activity, including sanctions evasion through mixers, peer-to-peer exchangers, darknet markets, and exchanges. This includes the facilitation of heists, ransomware schemes, fraud, and other cybercrimes.
Treasury continues to use its authorities against malicious cyber actors in concert with other U.S. departments and agencies, as well as foreign partners, to expose, disrupt, and hold accountable perpetrators and persons that enable criminals to profit from cybercrime and other unlawful activity.
What experts say?
Eric C. said, "I’ve literally met and interviewed the people who made Tornado Cash. Great, well intentioned people who wanted to create an option for privacy. Watching US Gov officials make up bold face lies that it’s created by North Korea is beyond infuriating."
Lefteris Karapetsas Founder of rotkiapp said, "So the @USTreasuryopened up #ethereum's @etherscan, took all addresses they have labeled as @TornadoCash and put them in a sanction list: https://etherscan.io/accounts/label/tornado-cash"
So the @USTreasury opened up #ethereum's @etherscan, took all addresses they have labeled as @TornadoCash and put them in a sanction list: https://t.co/TDHzN6Umbi
— Lefteris Karapetsas | Hiring for @rotkiapp (@LefterisJP) August 8, 2022
Source:https://t.co/HSvg8VJfur pic.twitter.com/dF1wtVFzNz
Read More
Read more about Crypto-Mixing - Crypto-Mixing
Related articles
Disclaimer: The information contained on this web page is for education purposes only. Readers are suggested to conduct their research, review, analyze and verify the content before relying on them.
To publish press releases, project updates, and guest posts with us, please email at contact@etherworld.co.
Subscribe to EtherWorld YouTube channel for ELI5 content.
Support us at Gitcoin
If you've something to share with the blockchain community, join us on Discord!
