Ethereum-Based Coin Mixer Tornado Cash has received a ban from the United States Department of Treasury’s Specially Designated Nationals And Blocked Persons List (SDN). The ban now prohibits US investors from operating the coin-mixing service’s chain in unlawful activity.
According to the US Department of Treasury, the motion was put into effect on Monday. Coin Mixers are utilized by companies to conceal the origin of any particular transaction with Ethereum-based Tornado Cash becoming particularly popular.
Insights into the ban on Tornado Cash
In the press release, Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson stated that the Treasury is sanctioning Tornado Cash, a virtual currency mixer that launders the profits of cybercrimes, including those perpetrated against victims in the United States. Despite public guarantees otherwise, Tornado Cash has constantly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic steps to address its risks. Treasury will continue to aggressively seek actions against mixers that launder virtual currency for criminals and those who assist them.
They were initially devised to keep investors’ transactions private, as they cover the path to the fund’s source. Regardless, the Tornado Cash mixer gained a sanction after becoming a popular mixer for hackers looking to hide their tracks in laundering strategies.
Tornado is the latest mixer to receive a sanction from the OFAC after Blender was once sanctioned. North Korea allegedly utilized Blender to launder over $500 million once robbed from Axie Infinity in the form of Ethereum.
Tornado Cash flared controversy after it revealed that it would use Chainalysis to block addresses formerly authorized by OFAC. The protocol is famous among hackers looking to hide their tracks after a theft. Previously Tornado Cash was operated by hackers who made away with 440 ETH from Bent Finance.
Tornado Cash was also in the hot seat back in February after the Web3Memes meme coin drew the rug under holders, lowering the value of the coin by nearly 100% and causing thousands of dollars worth of loss.
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