- The DoJ alleges that Tornado Cash was used to launder funds stolen from the Axie Infinity hack, the Nomad bridge hack, and the Harmony bridge hack.
- The DoJ also alleges that Tornado Cash was used to launder funds for North Korea’s Lazarus Group, a cybercrime group that has been linked to a number of high-profile cyberattacks.
The developers of Tornado Cash, a cryptocurrency mixer, have been charged with money laundering and sanctions violations. The US Department of Justice (DoJ) alleges that the developers helped hackers launder more than $1 billion in criminal proceeds through the mixer.
“As alleged in the indictment, the defendants operated a $1 billion scheme designed to help other criminals launder and conceal funds using cryptocurrency, including by laundering hundreds of millions of dollars on behalf of a state-sponsored North Korean cybercrime group sanctioned by the U.S. government,” said Attorney General Merrick B. Garland.
Tornado Cash is a decentralized application (dApp) that allows users to mix their cryptocurrency transactions, making it more difficult to track the source of the funds. The dApp works by breaking up the user’s cryptocurrency into smaller amounts and then mixing them with the cryptocurrency of other users. This makes it difficult to trace the original source of the funds.
The DoJ alleges that the Tornado Cash developers knew that their dApp was being used to launder money. The indictment against the developers states that they “intentionally violated” US sanctions by allowing users to launder funds that were stolen from North Korea.
The developers of Tornado Cash have been charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitter, as a result, they face a maximum sentence of 20 years in prison.
The charges against the Tornado Cash developers are a sign of the growing scrutiny of cryptocurrency mixers as mixers are increasingly being used by criminals to launder money, and governments are taking steps to crack down on their use.
The DoJ’s charges against the Tornado Cash developers send a message to the cryptocurrency community that mixers will not be tolerated, and that those who use them to launder money will be prosecuted
The case against the Tornado Cash developers is a reminder of the risks associated with using cryptocurrency mixers. Mixers can be used to launder money, and those who use them to commit crimes could face serious legal consequences.
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