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US Government Sanctions Crypto Mixer Tool, Tornado Cash

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The US government through its Department of Treasury has sanctioned the crypto mixer platform Tornado Cash. It accuses the platform of aiding criminal elements to launder billions of dollars in virtual assets.

Consequent to this move by the watchdog, residents of the United States are now prohibited from using the platform unless exempted.

The sanctions continue the treasury’s plan to detect and hold responsible platforms that aid criminals to profit from illegal actions.

According to reports from the watchdog, over $7 billion worth of digital assets has been cleaned using tornado Cash.

Earlier in May, the treasury department took the same line of action against crypto mixer tool Blender.io. It sanctioned the platform for processing parts of the funds stolen from the popular play-to-earn game Axie infinity’s Ronin Bridge.

Concerns raised by the US authorities

Some regulators and law enforcement agencies have always argued that crypto platforms provide users anonymity. Criminal actors use this cover to carry out nefarious activities that threaten national security.

Many of the proceeds of these hacks are laundered and channeled into funding terror cells and weapon proliferation.

The United States has accused North Korea of bankrolling its weapon program with funds stolen from its state-backed hacker group. An accusation that Pyongyang has vehemently denied.

The US government said it will continue to pursue actions against mixers laundering virtual currency for criminals and those who assist them.

Since its launch in 2019, Tornado Cash has been the go-to tool for hiding the movement or origin of funds.

While the treasury agrees mixer services are not illegal, it says the platform has not done enough to mitigate criminal transactions.

The tool was used in the attack on Horizon Bridge and most recently the exploit suffered by the Nomad Bridge.

Originally designed to improve the privacy of a transaction, mixers also known as tumblers, have come under heightened scrutiny. This is because of their frequent use in moving illicit funds.

There are also mounting concerns that sanctioned Russian entities have deployed the tool to evade sanctions.

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