On Friday, the watchdog for sanctions from the US Treasury Department raised the sanctions of Tornado Cash, a crypto mixture tool previously put on black list for allegedly helped the Lazarus group of North Korea in the money laundering of hacks and flights. This decision comes following a federal court of appeal ruled last November that the OFAC could not sanction the intelligent contracts of Tornado Cash because they do not constitute the “property” of any foreign element.
Tornado money is free, but its developer remains detained
According to a recent press releaseThe United States Treasury has canceled a previous decision by removing the Ethereum Coin Mixing Service Tornado Cash service from the list of sanctioned entities of the Foreign Assets Office (OFAC). This decision comes after Tornado Cash was initially put on black list in 2022.
The tool had faced multiple SOFAC sanctions, prohibiting American entities and individuals from financial interactions with it.
The press release indicates: “We remain deeply concerned about the hacking and money laundering campaign sponsored by the state aimed at flying, acquiring and deploying digital assets for the Democratic People’s Republic of Korea (RPDC) and the Kim regime.”
This decision follows a court decision on November 26, 2024 by the American Court of Appeal for the fifth circuit. The court concluded that the OFAC was going beyond its powers by sanctioning the intelligent contracts of Tornado Cash, which, according to the court, are not considered as “goods” under American law.
Although the Tornado Bunnelie is no longer sanctioned, the developer associated with him, known as Semenov, remains under sanctions. However, his sanctions were adjusted to remove the charges related to cyber-activity, although his link with North Korea maintains it on the list of sanctions.
In addition, Roman Storm, co-founder of Tornado Cash, is expected to face a criminal trial in July. He is accused of having allegedly developed smart contracts and protocols for the service. Meanwhile, another involved developer has also been charged but has not yet been arrested.
After the announcement, the value of the Tornado cash money cryptocurrency increased, recording an increase of 54% in the last 24 hours.
Connection of Tornado Cash with the Lazare group
Initially sanctioned in August 2022, Tornado Cash was accused of having turned more than $ 7 billion in cryptocurrency, including large sums stolen by the Lazarus group of North Korea. The authorities have stressed that the platform played a key role in the money laundering of several major flights: more than $ 455 million in infinity Ronin Bridge, $ 96 million in Heist Harmony Bridge and $ 7.8 million in the Nomad Heist.
The secretary of the Treasury Scott Bessent said: “Digital assets have enormous opportunities for innovation and value creation for the American people. The security of the digital asset industry of northern mistreatment and other illicit players is essential for the establishment of American leadership and that the American people can benefit from financial innovation and inclusion. “
It is important to mention that the tornado continued to operate despite the American sanctions and the ongoing legal battles, which has frustrated many legislators. In addition, the co-founder of Ethereum, Vitalik Buterin, openly said that he had used the service to make anonymous donations in support of Ukraine during his conflict with Russia.