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US Treasury Applies Sanctions to Tornado Cash Addresses

US Treasury Applies Sanctions to Tornado Cash Addresses

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Tornado Cash has received a package full of sanctions and restrictions from the US Treasury Department.

Tornado Cash, a cryptocurrency mixing service founded by Roman Storm and Roman Semenov, is US Treasury sanctions.

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By opinion distributed on August 8, the US Treasury has included 44 crypto addresses associated with Tornado Cash on its OFAC (Office of Foreign Asset Control) Specially Designated Nationals list.

This list placed 44 USD Coin (USDC) and Ether (ETH) addresses among terrorists and drug traffickers. US residents should not interact with these addresses.

If users choose to ignore these provisions, fines can be imposed between $50,000 and $10,000,000. Moreover, they can get 10 to 30 years in prison.

Under these sanctions, users cannot work on projects, visit their website, send Gitcoin donations, use or download its software and deposit/withdraw smart contracts.

These limitations stem from claims that the mixer has been involved in several money laundering programs. According to the Ministry of Finance, individuals and other groups have used the protocol for money laundering over $7 billion worth of crypto The agency also claims that the protocol has been involved in a $455 million hack by the Lazarus Group, as well as the attack on Wormhole in February and the Horizon Bridge attack in June.

Brian E. Nelson, Under Secretary of the Treasury for Terrorism and Money Laundering, commented on the matter by saying:

Despite public assurances, Tornado Cash has repeatedly failed to put effective controls in place to prevent it from laundering funds for malicious cyber actors on a regular basis and without basic risk mitigation measures in place. The Ministry of Finance continues to take aggressive actions against mixers that launder virtual currencies for criminals and those assisting them.

Tornado Cash’s problems don’t end there. Following legal sanctions, USD Coin (USDC) stablecoin issuer Circle has frozen more than 75,000 USD worth of funds associated with 44 crypto addresses placed on the list of Specially Designated Nationals.

Tornado Cash founder Roman Semenov has also been affected by these sanctions. Semenov has been suspended from using his GitHub account.

It remains unclear why Semenov’s account has been suspended. However, if the co-founder owns one of the 44 crypto addresses affected by the restrictions, it would result in restricted access to all business-related websites, including GitHub.

Gile K. - cryptanalyst

by Gile K. – Crypto Analyst, BitDegree

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