Showing posts with label tornado cash. Show all posts
Showing posts with label tornado cash. Show all posts

New Data Shows Majority of Transactions were TOTALLY LEGAL on Now-Banned Crypto 'Mixer' Tornado Cash...

Tornado Cash

Last week we covered news that the US Treasury Department had sanctioned Ethereum's controversial transaction mixer, Tornado Cash, for allegedly enabling money laundering.

This was only the second time the US government has taken such an action against a crypto mixing site.

However, a deep analysis of blockchain transaction data is showing the platform was mostly used for completely legal activities...

In fact, just over 30% of the funds sent to that protocol were used for money laundering, at least according to one blockchain analytics firm. 

Slowmist, which included their findings in a report on blockchain security, using the first 6 months of 2022, they found Tornado Cash received total deposits of 955,277 ETH (worth $1.7 Billion at current prices), with 300,160 ETH being related to potential illegal activity. 

This means that there's no (known) legal issues with approximately 70% of the operations of the platform.

If you read the US Treasury Department's press release announcing the sanction against Tornado Cash, you would have the impression that the site was built for, and only used for illegal purposes.  They described it as “A virtual currency mixer that launders the proceeds of cybercrimes, including those committed against victims in the United States."

For some perspective: If true, the study shows Tornado Cash may equally as popular with criminals as printed US Currency...

If we go by the estimates of Harvard University Professor of Economics Kenneth Rogoff - up to 34% of printed money is currently being used to facilitate illegal transactions.

But if I had to guess what primary factor was in the US government deciding to officially act against Tornado Cash, it would be the news that North Korean hackers, aka the 'Lazarus Group' were also using the mixer to launder crypto the have been obtaining through various, always illegal methods. 

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Author: Mark Pippen
London News Desk 
Breaking Crypto News

Two Crypto 'Mixing' Sites Sanctioned - Now ILLEGAL For US Citizens to Access after They Allegedly Laundered Millions for North Korean Hackers...

By dividing a user's deposit into a random number of parts and distributing those pieces to other users, a cryptocurrency "mixer" essentially muddles up the transactions of individuals who make deposits to them. In exchange, you receive the same amount back (less fees) from other anonymous users.

Tracking stolen cryptocurrency becomes difficult since it may rapidly change hands from one person to dozens when 'mixed'.

Tornado.Cash joins Blender.io on the list of mixer websites that are now forbidden for US citizens to access after being sanctioned by the US Treasury today.

The US Treasury estimates that since Tornado's inception in 2019, more than $7 billion in virtual currency has been laundered on the platform.

However, it's the $455 million from the "Lazarus Gang," a hacker group supported by the North Korean government, is what officials find most upsetting.

The sanctions also covered 44 wallets, making it prohibited to receive or send money to any those addresses.

Tornado Cash made an effort to abide by the rules, but ultimately failed.

In attempts to comply with the US government but still function for it's users, Tornado Cash implemented improvements like a screening tool to stop money from travelling between it and bitcoin wallets that officials say are tied to illegal activity.

Despite that, the Lazarus Group and other hackers were still able to transmit money to Tornado Cash for money laundering, according to a law enforcement investigation of open cryptocurrency transactions, the official added.

“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,”
Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson said in a statement. “Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them.”

Treasury officials added that they hope this motivates the private sector and partner nations to help in regulating illegal use of crypto.

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Author: Mark Pippen
London News Desk 
Breaking Crypto News

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