U.S. Treasury Sanctions Ethereum Mixing Tool Tornado Cash

“Twister Money has repeatedly didn’t impose efficient controls designed to cease it from laundering funds for malicious cyber actors,” an announcement from the Treasury stated. 

Treasury Sanctions Twister Money 

The U.S. Treasury Division has banned Twister Money. 

The federal government company’s Workplace of Overseas Belongings Management added the favored Ethereum mixing software to its sanctioned listing Monday. A post on the Treasury’s web site confirms that the protocol’s web site and its related sensible contracts are actually blocked. 

In a press release, Below Secretary of the Treasury for Terrorism and Monetary Intelligence Brian E. Nelson stated:

“Right now, Treasury is sanctioning Twister Money, a digital forex mixer that launders the proceeds of cybercrimes, together with these dedicated towards victims in the USA. Regardless of public assurances in any other case, Twister Money has repeatedly didn’t impose efficient controls designed to cease it from laundering funds for malicious cyber actors frequently and with out primary measures to deal with its dangers. Treasury will proceed to aggressively pursue actions towards mixers that launder digital forex for criminals and people who help them.”

The press launch additionally claimed that the protocol had been used “to launder greater than $7 billion value of digital forex since its creation in 2019.” Based on Dune data compiled by @poma, Twister Money has seen $7.6 billion in lifetime quantity, suggesting that the Treasury could also be classifying all earlier transactions as makes an attempt to “launder” funds.

“DPRK State-Sponsored Hacking Group”

Secretary of the State Anthony Blinken additionally posted an update on the ban, together with the doubtful declare that Twister Money was a “DPRK state-sponsored hacking group.” He added that the federal government would “proceed to aggressively pursue actions towards forex mixers laundering digital forex for criminals.”

Twister Money is a well-liked utility that lets Ethereum customers obfuscate transactions to protect their privateness. It lets customers deposit their belongings to sensible contracts after which withdraw them from a brand new deal with to make their on-chain exercise more durable to observe. Twister Money has turn into a pillar of the Ethereum ecosystem for a lot of customers, however it’s additionally gained notoriety on account of its recognition amongst hackers. Every time a DeFi hack happens on Ethereum, the thieves have a tendency to make use of Twister Money to cowl their tracks and make off with the stolen funds. Over $1 billion of illicit funds has been funneled via the protocol over the previous 12 months, together with a portion of the $550 million stolen within the record-breaking assault on Axie Infinity’s Ronin bridge in March.

Twister Money sparked controversy locally in April when it introduced that it had began utilizing Chainalysis oracle to dam addresses that had been sanctioned by OFAC. “Sustaining monetary privateness is important to preserving our freedom, nonetheless, it mustn’t come at the price of non-compliance,” Twister Money stated on the time, elevating questions on its diploma of decentralization.

OFAC has issued a number of crypto-related sanctions up to now, however this one is notable in that it targets a protocol slightly than only a web site frontend. The listing of blocked addresses contains the proxy deal with, the ten ETH deposit contract, the 100 ETH deposit contract, and the 100 DAI deposit contract, amongst others.

Twister Money has not but publicly commented on the event. Crypto Briefing reached out to the workforce however had not acquired a response at press time.

This story is growing and shall be up to date as additional particulars emerge. 

Disclosure: On the time of writing, the writer of this piece owned ETH and several other different cryptocurrencies.