Crypto mixing service Tornado Cash is now banned in in the U.S..
On August 8, the Office of Foreign Asset Control, an enforcement agency of the U.S. Treasury Department, added Tornado Cash to its Specially Designated Nationals list.
The list includes thousands of people, companies, and organizations that have been identified as posing a threat to U.S. national security.
The move makes it illegal for US citizens to interact with any wallets or contracts related to Tornado Cash.
Following the announcement, Tornado Cash’s Github repository has been taken down. Co-founder Roman Semenov says that his account has been suspended.
Tornado Cash is a so-called crypto mixer, known for anonymizing Ethereum transactions by breaking the on-chain link between source and destination addresses. Its smart contracts accept crypto deposits that alternate addresses can then withdraw. The total value locked on the platform stands at $467M.
According to the US Treasury, Tornado has been used to launder over $7B of crypto assets since its creation in 2019. It was also allegedly used by North Korean hackers The Lazarus Group to launder over $455M from their attack on Axie Infinity’s Ronin network. The Treasury also says that over $96M in crypto was laundered from the Harmony Bridge Heist and at least $7.8M from the Nomad Heist.
“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,” said Brian E. Nelson, Undersecretary of the Treasury for Terrorism and Financial Intelligence.
Tornado is not the first crypto mixing service to be banned. In May, OFAC sanctioned Blender.io after it too was allegedly used to launder money from a hack against the Ronin network. The Treasury report states that “virtual currency mixers that assist criminals are a threat to US national security” and that they will continue to investigate crypto mixers.
Within an hour of the announcement, crypto users on Twitter are already discussing forking the Tornado code to create a new mixer.
UPDATED on 8/8 @ 3:30pm ET to reflect Tornado’s Github page being taken down.