Skip to main content

US Bans Crypto Mixer Tornado Cash: An Attack on Privacy?

 


The US Treasury Department declared crypto mixer Tornado Cash illegal on August 8, 2022.


Persons in the US are now prohibited from using the Tornado Cash Mixer. Otherwise there is a risk of criminal prosecution. The US authority justified the measure with the massive increase in money laundering activities associated with the mixer. Tornado Cash is the second crypto blender to be banned in the United States after Blender.io.


What is a crypto mixer?

A crypto mixer is a tool that allows you to obfuscate the origin of your coins and protect your privacy. You can do this by sending cryptocurrencies (such as Bitcoin) to a mixer. The mixer then breaks the connection between transactions by first chunking your cryptocurrencies and then mixing them with other crypto transactions. You will then receive coins whose origin can only be traced back with difficulty or not at all.


Tornado Cash is built on the Ethereum blockchain and performs mixing via ERC-20 tokens and smart contracts. Tornado Cash emerged in 2019 and is one of the most popular crypto mixers out there. But be careful: Even if crypto mixers can protect your privacy, they can sometimes entail legal risks.

According to the US Treasury Department, Tornado Cash has laundered more than $7 billion in total to date.


For example, the North Korean Lazarus Group used Tornado Cash to launder the funds from the Ronin Bridge hack. This is the largest crypto hack to date , with the hackers stealing more than half a billion US dollars worth of crypto.


Additionally, Tornado Cash was used to launder more than $96 million from the June 24, 2022 Harmony Bridge heist and at least $7.8 million from the August 2, 2022 Nomad heist hack.


Crypto mixers remain legal in the US for now as it is software only. However, since money laundering is still illegal, the US Treasury Department wants to take further action. The US Treasury Department wrote in the press release:


"The Treasury Department will continue to act aggressively against mixers who launder virtual currencies for criminals and those who assist them in doing so."


The Ministry of Finance also imposed sanctions on the owners of the addresses connected to the service. Individuals in the US who hold a crypto wallet linked to Tornado Cash are to report to the US agency. The measures are intended to protect “US citizens” and “national security”.


GitHub and Circle cooperate with US authorities

In response to the sanctions , stablecoin provider USDC froze all funds associated with Tornado Cash and its associated smart contract. The software platform GitHub also reacted to the news and deleted the account of Roman Semenov, the developer of Tornado Cash. Semenov wrote:


“My @GitHub account has just been suspended. Is it now illegal to write open source code?”


Is it now illegal to write an open source code?

In addition, the Tornado Cash website went offline following the US Treasury Department's report.


Several members of the crypto community criticized the actions of the US Treasury. While the agency's measures against illegal activities may help, many see freedom and privacy at risk. For example, the founder and CEO of the cryptocurrency Gnosis, Martin Köppelmann, criticized the actions of the US Treasury Department.


According to the crypto enthusiast, there are enough reasons to want to hide the background of crypto transfers. This includes not only the protection of salary data. With the right laws, governments could monitor all wallet transactions in the future. Therefore, Köppelmann argued that the measures were not a "war on money laundering" but a "war on privacy".


Disclaimer

All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at their own risk.

My Top Picks
Honeygain - Passive earner that pays in BTC or PayPal
MandalaExchange -The Best no KYC crypto Exchange! 
BetFury - Play And Earn BFG for daily Bitcoin and ETH dividends!
Pipeflare - Faucet that pays in ZCash and Matic, Games pay in DAI
Womplay - Mobile dApp gaming platform that rewards in EOS and Bitcoin
Cointiply - The #1 Crypto Earning Site
Torum - Join the latest Social Network and earn TRM for Free! 
LiteCoinPay - The #1 FaucetPay earner for Litecoin 
LBRY/Odysee - YouTube Alternative that lets you earn Money by viewing videos!
FaucetPay - The #1 Microwallet Platform
FREEBTC - The #1 FaucetPay earner for Satoshi's
FaucetCrypto - An earning/faucet site that pays out instantly
FireFaucet - An earning site that pays better for some than Cointiply
DogeFaucet - Dogecoin Faucet
xFaucet - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BCH, BNB, ZEC, FEY - Claim every 5 minutes
Konstantinova - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BNB, ZEC, USDT, FEY, 25 Claims Daily

Comments

Post a Comment

Popular posts from this blog

From offchain to offchain: Statechains meets Lightning

  Without a doubt, the most significant off-chain Bitcoin solution is the Lightning network. But in its wake, the statechain has emerged as an intriguing replacement. There is currently a proposal to link the two offchain networks. From an ocean, for example, you can see sunbeams glistening in the water, waves rippling, and possibly a jellyfish drifting toward the light. But you only see a small portion of it. The distance from the sea's surface to its bottom is hundreds of meters. It has dozens of different fish species swimming in it, crabs and starfish crawling on the bottom, shells clinging to rocks, and sea plants climbing up. A completely new world starts where your gaze diverges. You can picture a blockchain like Bitcoin, just like the sea. What you see on the outside is only a small portion of what is actually there; the set of UTXOs (coins) and transaction history that full nodes store are just the beginning of a much larger world. It's the plan, at least. With Bitcoin...
Post a Comment
Read more

Phishing attack on popular crypto sites tries to empty wallets

  Several major crypto sites such as Etherscan, CoinGecko, DeFi Pulse, and others report malicious pop-ups scammers use to try to trick users into connecting their MetaMask wallets. The phishing attack came from a domain displaying the Bored Ape Yacht Club (BAYC) logo. "We are investigating the root cause of this attack to fix the threat as soon as possible," CoinGecko founder Bobby Ong tweeted. The phishing attack appears to have been triggered by a malicious ad script from Coinzilla, a crypto ad network, according to CoinGecko. Etherscan also advises its users not to confirm any transactions that may appear on the website. The attackers attempted to use the hype around the “bored monkeys” non-fungible tokens (NFT) to gain access to the cryptocurrencies of unsuspecting website visitors. Although the websites affected by the scam attempt have reacted in the last few hours and deactivated the advertising pop-up, it is still recommended not to connect your MetaMask wallet to ne...
Post a Comment
Read more

Bored Ape Yacht Club NFTs stolen through phishing on Instagram

  Bored Ape Yacht Club ( BAYC ) developers announced on Monday that hackers have hijacked the official Instagram page of the popular NFT collection and posted links to a fake airdrop. Crypto enthusiasts who connected their MetaMask wallet to the rogue website subsequently had their Ape NFTs stolen. Apparently, the attack was planned to coincide with the one-year anniversary of the BAYC collection. This increased the "perceived credibility" of the phishing link. About 100 NFTs are said to have been stolen in the phishing attack . According to CoinGecko data , the minimum price for a BAYC NFT is 139 Ether ( ETH ) or $400,726. So if reports are correct, over $40 million worth of NFTs were stolen in the attack. These numbers are only the lowest estimate, however, as they are based on the lowest price.  At the time of writing, it was still unclear how the hackers gained access to BAYC's official Instagram account. Social media users have pointed out the importance of two-fact...
Post a Comment
Read more