Tag: crypto mixers

US Treasury Department Levies Sanctions Against Crypto Mixer Tornado Cash for Being Used to Launder Money

The US Treasury has sanctioned zero-knowledge proof-based private transaction protocol Tornado Cash for its complicity in a crypto laundering case. The digital currency mixing service has allegedly been used to launder more than $7 billion (roughly Rs. 55,672 crore) worth of virtual currency since its creation in 2019, the Treasury said in announcing the enforcement action. That includes the more than $455 million (roughly Rs. 3,618 crore) stolen by the Lazarus Group, a state-sponsored hacker collective with ties to North Korea.

Speaking on the development, Brian Nelson, undersecretary of the Treasury for Terrorism and Financial Intelligence, explained, “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.”

As a result, the US Treasury watchdog, the Office of Foreign Asset Control (OFAC), has prohibited citizens and businesses from using Tornado Cash. In addition, Nelson also suggested that the department’s latest sanctions against a mixer would not be the last. As he put it, “Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them.”

Tornado Cash, alongside other mixers including AlphaBay, facilitates the concealment of customer crypto transactions in exchange for a fee. The decentralised Ethereum-based mixing service achieves this by blending potentially identifiable funds with others. Mixing services obscure the source of the digital currencies as well as shroud their eventual destination.

As a result of the fresh sanction, Tornado Cash’s website and a long list of Ethereum addresses have now been added to the Treasury department’s Specially Designated Nationals list.

The US Treasury’s sanction against Tornado Cash comes after the department took similar action against mixer Blender.io in May. According to reports, Blender.io allegedly processed a small fraction of the $620 million (roughly Rs. 4,932.8 crore) in ETH and USDC stolen from Axie Infinity’s Ronin Bridge.

Check out our Latest News and Follow us at Facebook

Original Source

Crypto Mixers: Privacy Tools That Emerged as Safe Havens for Scamsters

Crypto mixers are privacy tools that help make crypto transactions between two parties completely anonymous. The idea behind crypto mixers is to remove any digital signatures associated with a particular trade and maintain privacy. More often than not, crypto mixers do not ask for Know-Your-Customer (KYC) information, that make them appealing for scammers churning capital from duping non-suspecting investors. Nearly 10 percent of all funds sent from illicit addresses are sent to mixers, a report by Chainalysis has recently attested.

Tornado Cash, Blender, ChipMixer, FoxMixer, and Anonymix are some examples of crypto mixers that are popular among users. The category of crypto service is infamous for being exploited by money launderers to ‘clean’ the funds in their possession.

Transferring funds to the destination wallet via a crypto mixer needs the assets to first be mixed into a private pool. The deposited virtual tokens are then mixed with other people’s tokens before being transferred to the destination wallet.

Nearly 10 percent of all funds sent from illicit addresses are sent to mixers, the Chainalysis report said earlier this year.

Funds sent to mixers by cyber-criminal groups linked to Russia and North Korea, have risen dramatically between 2021 and 2022.

Russian darknet market Hydra, which was sanctioned in April 2022, accounted for 50 percent of all funds that were moved to the mixers from sanctioned entities this year alone.

While crypto mixers are not entirely illegal, they could be dragged under the legal scanner for financial investigation purposes.

Crypto exchanges can also flag details of those users who use crypto mixers very frequently to carry out transactions.

The percentage of funds passing through crypto mixers from the custody of cyber criminals touched $51.8 million (roughly Rs. 413 crore) in April 2022. This marks the highest volume of crypto funds so far to have been wired to destination wallets via crypto mixers.

Recently, when hackers earned ETH 275 from selling stolen NFTs from the Premint attack were wired into unknown wallets after having been passed from the TornadoCash crypto mixer.

Blockchain security firms like Chainalysis are working on bringing out tools that can reverse-engineer and demix transactions processed via crypto mixers.

Check out our Latest News and Follow us at Facebook

Original Source

Exit mobile version