US Lifts Sanctions on Tornado Cash

Sanctions Lifted on Tornado Cash by U.S. Treasury

Officials from the U.S. Treasury Department have removed sanctions imposed on Tornado Cash, a cryptocurrency mixing service. Previously, the U.S. government asserted that this platform facilitated the laundering of $7 billion in cryptocurrency.

This decision, as outlined in a recent statement, reflects the Treasury’s “discretion” in delisting Tornado Cash, following a period of legal challenges. Sanctions prohibit U.S. citizens and businesses from engaging in transactions with entities on the sanctioned list.

How Crypto Mixers Operate

Cryptocurrency mixers are designed to obscure the origins of digital assets. They achieve this by combining funds from multiple sources, including those with potentially illicit backgrounds.

In 2022, the Treasury Department labeled Tornado Cash as “notorious” for its alleged role in laundering cryptocurrency stolen through cyberattacks. These attacks were attributed to North Korea, which reportedly seeks to fund its nuclear weapons program through such illicit gains.

Furthermore, in August 2023, criminal charges were filed in a New York federal court against the two individuals who founded Tornado Cash. The charges included conspiracy to commit money laundering and violations of sanctions regulations.

Ongoing Concerns Regarding North Korean Cyber Activity

Despite the delisting, the Treasury Department emphasized its continued “deep concern” regarding the ongoing threat posed by cryptocurrency-related cyberattacks originating from the North Korean government.

The U.S. government remains vigilant in addressing the risks associated with illicit financial activities within the cryptocurrency ecosystem. Efforts to counter these threats are expected to continue.