Sign Up on MEXCJust In: Nomad Hack Related Crypto Mixer Sanctioned By U.S. Dept
An office under the U.S. Department of the Treasury sanctioned crypto mixer Tornado Cash for laundering money worth billions. In an announcement made on Monday, the Office of Foreign Assets Control (OFAC) found activities of a U.S. sanctioned hacker group. The department accused Tornado Cash of laundering funds related to cybercrimes in the country. It described Tornado as a virtual currency mixer that launders the proceeds of cybercrimes.
One such example of a cyber crime was the $80 million exploit on DeFi exchange Fei Protocol earlier this year in April. After moving the funds in Wrapped Ethereum from the protocol to their personal wallet, teh perpetrators used Tornado Cash. Crypto mixers are designed to make transactions untraceable, making it tough to trace where exactly stolen funds are stored.
Tornado Cash Sanction By Foreign Assets Control Office
The OFAC said it sanctioned the crypto mixer for laundering more than $7 billion in crypto assets since its creation in 2019. It added that a part of the laundered money was associated with a Korea based hacking group which was already sanctioned by the U.S.
“(The money laundering) includes over $455 million stolen by the Lazarus Group, a Democratic People’s Republic of Korea (DPRK) state-sponsored hacking group that was sanctioned by the U.S. in 2019, in the largest known virtual currency heist to date.”
Usage In Recent Nomad Hack
As recently as last week, the crypto ecosystem witnessed the Nomad hack involving loss of at least $8 million. Although the extent of financial loss is yet to be ascertained, around 41 addresses were compromised in the exploit. Perpetrators in this hack too, the OFAC said, utilized Tornado hack after gaining access to the funds.
Brian E. Nelson, a U.S. official, said Tornado Cash repeatedly failed to curtail malicious cyber activities. “Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls. They failed to control laundering funds for malicious cyber actors and without basic measures to address risks.” Tornado indiscriminately facilitates anonymous transactions by obfuscating their origin, destination, and counterparties, with no attempt to determine their origin, the OFAC said.
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