- The U.S. Treasury says the looted crypto, with the help Tornado Cash, surpasses $7 billion.
- The U.S. government fears that North Korea’s regime will use stolen crypto to fund missile trials.
- The U.S. Treasury has previously imposed sanctions on crypto mixer Blender.io.
The notorious cryptocurrency mixer is often mentioned as a go-to tool for cybercriminals from the infamous Lazarus Group, prompting the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) to announce the measure in a press release on August 8th.
Over $7B Crypto Laundered Since Launch
The U.S. Treasury Department also identified the sum of $7 billion in laundered crypto assets since Tornado Cash launched in 2019. The government officials also addressed the largest crypto exploit of the year, Axie Infinity’s Ronin bridge hack. According to the Treasury, the Lazarus Group is solely responsible for the $600 million hack. At the time, the North Korean fraudsters looted 173,500 ETH, along with $25.5 million in stablecoin USD Coin (USDC).
Due to the fact that the crypto mixer “poses a national threat”, Tornado Cash will no longer be available for users residing in the United States. Moreover, Circle Pay and USDC have officially blocked all of the addresses on the Ethereum (ETH) blockchain mentioned in the new sanction list. The move caused mixed reactions from crypto enthusiasts, to the extent that even the ill-famed Do Kwon, CEO of Terra Luna, broke his months of silence.
Do Kwon reminded the crypto community of the need for “decentralized money”. One crypto enthusiast, going by the handle “Mounia”, gave Mr. Kwon what we can only call a 1st degree burn, stating: “criminals like you need to be behind bars – obvious today more than ever”.
North Korea’s Regime Storms in to Rob Everyone
Tornado Cash is mostly used to erase on-chain tracking history. As the crypto mixer’s official website explains: “To achieve privacy, Tornado.Cash uses smart contracts that accept token deposits from one address and enable their withdrawal from a different address.” Some users argue that the reasoning behind such technology can be legitimate: for instance, to conceal sensitive financial information from an employer. However, the fact that the Tornado Cash crypto mixer has been used in a range of different hacks and phishing scams is simply undeniable.
The recent hacks of the Harmony and Nomad bridges have both been allegedly linked to the Lazarus Group, a highly trained organization of hackers from North Korea, intensively trained by the government to hack crypto intiatives. Furthermore, it has been reported that North Korea’s regime may be utilizing the stolen crypto funds to finance their nuclear tests and missile trials. Ultimately, North Korea seems to be attempting to tear the earth apart in a literal sense, and it’s unclear if sanctions on crypto mixing services will be enough to prevent the Lazarus Group from doing any more damage.
On the Flipside
- Curbing crypto mixing services poses inherent risk to financial decentralization.
- Many crypto enthusiasts argue that the most effective money laundering is done with the help of banks.
- The ban on USDC-related Ethereum addresses could stand to affect legit investors.