Crypto mixer Tornado Cash has sanctions issued against it by the US Treasury Department. Its ability to operate has been stunted by Web3 development companies like Infura and Alchemy blocking users as well. This blocking prevents user access to related applications.
According to reports, the Treasury Department put 44 addresses (smart contracts) related to Tornado Cash on a special blocked list. US citizens and companies are banned from all Tornado Cash interactions and violations could lead to criminal prosecution.
This move was made after the Department after groups and individuals allegedly used the privacy offered by the protocol to launder money. The amount in question was more than $6 billion and this activity was carried out over a three-year period, starting in 2019. The allegation also includes a $455 million amount believed to be stolen by the Lazarus Group, which has close affiliations to North Korea.
Right after this announcement was made, Circle, a stablecoin issuing company froze all funds held by Tornado’s smart contract addresses. Programming company and repository GitHub also disabled the main page related to the project, took it down, and blocked access.
ETH co-founder Vitalik Buterin said that he had donated to Ukraine using Tornado Cash. The intention was to safeguard a recipient’s privacy and block the Putin government from finding out details. Many others have said that the mixer offers privacy applications.
People who receive money in crypto are safe from providing financial details to employers. Tornado’s tool has resulted in offering hackers an anonymous method to steal funds and launder them across cross chains. To date, more than $2 billion has been stolen by using such applications.