The Tornado Cash cryptocurrency mixer has been banned in the United States, where authorities have decided that it contributes to money laundering.
Cryptocurrency mixers are services that hide the origin of funds exchanged in crypto. They guarantee the anonymity of transactions made in this way.
Stormy weather for Tornado Cash
Tornado Cash therefore makes it possible to mix cryptos. By pooling funds for a period of time before redistributing them to their original destination, it confuses the issue. This type of service makes it difficult to identify and trace flows, and makes it possible to escape public registers which list all transactions made with crypto-currencies.
Thus, it is a good way to launder money. At least that is what the American financial authorities think. According to them, Tornado Cash would have allowed the laundering of 7 billion dollars since its creation. In addition, the mixer allegedly allowed the transit of funds stolen from the Lazarus Group, the North Korean cybercriminal group.
Blacklisted Tornado Cash
Tornado Cash was first ordered to impose controls on the source of funds exchanged on its service. But according to the American authorities, these controls were never put in place. The United States has therefore completely banned the use of the cryptocurrency mixer. Americans therefore no longer have the right to have an account there, and it is strictly forbidden to collaborate with the company.
Authorities consider crypto mixing services to provide criminals with the opportunity to hide their financial transactions. Thus, they reduce to nothing the effectiveness of traceability protocols for large sums from questionable sources. These services pose a real problem for monitoring financial flows on a global scale.
Counter-attacks have already been organized on the legal level: the NGO Coin Center already wants to retaliate against the OFAC (Office of Foreign Assets Control) which, according to them, has exceeded the limits of its authority.
Source : The world
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