The Treasury Department sanctioned a major crypto entity used to anonymize transactions, alleging that it has been used to launder more than $7 billion in cryptocurrency, including digital assets stolen by foreign entities.
The Treasury Department announced on Monday that it was sanctioning Tornado Cash, a virtual protocol that allows users to send their cryptocurrency from their wallets and get it back via different addresses, making the origin location of the cryptocurrency harder to track. This company was most notably involved in laundering $455 million in cryptocurrency stolen by the Lazarus Group, a North Korean hacker group sanctioned by the United States, believed to be behind one of the largest crypto thefts in history.
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“Today, Treasury is sanctioning Tornado Cash, a virtual currency mixer that launders the proceeds of cybercrimes, including those committed against victims in the United States,” Undersecretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson said in a press statement. “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. Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them.”
Tornado Cash has been a standard tool for hiding the theft of crypto, according to VICE. The service was founded by Roman Semenov, owner of the cybersecurity firm PepperSec, and is used by an assortment of clientele, including criminals, to move cryptocurrency.
The Treasury Department has sanctioned other crypto companies in the past. The Department sanctioned Blender.io, another mixing service that helped launder proceeds from ransomware payments.
North Korea has been blamed several times for hacking and stealing crypto assets. The FBI blames North Korea for stealing $620 million from the Ronin blockchain in April, the largest cryptocurrency theft to date. An estimated 18% of Ethereum placed within Tornado Cash in recent months came from the Ronin hack, according to data released by the crypto firm Nansen.
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The country’s hackers are also believed to be behind recent attempts to create fake resumes for remote employees in an effort to apply to crypto companies and gain access to internal systems, according to research released by the security firm Mandiant.
Mandiant’s research correlates with May warnings from the FBI. The bureau warned U.S. businesses against inadvertently hiring freelancers from North Korea due to them potentially hiding their true identity and connection to the North Korean government.
