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US Sanctions Cryptocurrency Service allegedly used by North Korea for Money Laundering

Tornado Cash, a virtual currency exchange, was sanctioned by the US Treasury on Monday due to its usage by cybercriminals, including individuals who are subject to US sanctions. A senior Treasury official claims that since its introduction in 2019, Tornado Cash has allegedly laundered more than $7 billion in virtual money, including $455 million from the Lazarus Group, a North Korean state-sponsored hacking organisation. According to the source, it was also utilised just last week to conceal funds from a “heist” on the US Cryptocurrency company Nomad.

The virtual currency mixer will no longer be used as of Monday due to the penalties against US citizens and others under US jurisdiction. To make it more difficult to determine where the money originated from or where it is going, a virtual currency mixer accepts a number of transactions and combines them before transferring them to their final destination. According to the senior Treasury official, Tornado Cash did made some measures to adhere to its regulatory requirements, notably by implementing a screening mechanism to stop money from travelling to previously barred bitcoin wallets.

However, despite that, the Lazarus Group and other hackers were still able to transmit money to Tornado Cash for money laundering, according to a law enforcement investigation of open Cryptocurrency transactions, the official added. 44 Cryptocurrency wallets connected to Tornado Cash were blacklisted by the US authorities as part of the move on Monday. The Treasury representative acknowledged that Tornado Cash has previously been flagged as a problem but failed to specify for how long, where the organisation may be situated, or who may be its operators.

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