REUTERS/KCNA
- The US Treasury sanctioned Tornado Cash, a cryptocurrency platform used by criminals for obscuring origins of funds.
- As of Monday, all US entities or persons are barred from using Tornado Cash.
- North Korea cyber-criminals have laundered $1 billion in crypto through this platform, TRM Labs said.
The US Treasury Department's Office of Foreign Asset Control on Monday sanctioned crypto platform Tornado Cash, which North Korean hackers have used for laundering.
The sanctions prohibit any Americans or American entities from using Tornado Cash. The government alleged the platform had shortcomings that benefited cyber-criminals, who have used Tornado Cash to launder $7 billion in crypto.
"Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks," said Brian Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, in a statement.
And according to a separate estimate from TRM Labs, North Korea alone has laundered approximately $1 billion in stolen funds through Tornado Cash.
The digital asset mixer — which is used to obscure the origins of funds and privately transact on the Ethereum blockchain — was involved in the Axie Infinity hack in March, when North Korean cyber-criminal group Lazarus stole $625 million.
"Today's sanctions against Tornado Cash is a watershed moment, not only for the crypto industry, but for financial sanctions writ-large as it targets, as, opposed to prior sanctions, a widely used mixing service and, potentially, answers the question of whether or not US regulators and law enforcement are going to tolerate the use of mixers to launder illicit proceeds," Ari Redbord, head of legal and government affairs at TRM Labs, told Insider in emailed comments.
Efforts to reach Tornado Cash for comment were not successful.
Redbord also noted that North Korea in particular is a cash-strapped government with minimal export revenues, so cryptocurrency laundering has a particularly high upside for the nation's bad actors and could be used to fund weapons programs.
In April, Redbord told Insider that North Korean groups have perpetrated many online hacks, but they've grown increasingly sophisticated over time.
"Over the last year or so, we've moved from a post 9/11 world into a new digital battlefield," he said previously. "Nation-state actors know to go after crypto businesses to fund real weapon proliferation. It's not just some hackers trying to fund a lifestyle."
from Business Insider https://ift.tt/FPEWLGA
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