On August 8, 2022, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the virtual currency mixer Tornado Cash. This mixer has been used to launder cryptocurrency worth over $7 billion since its inception in 2019. Stolen virtual funds from some of the biggest heists were laundered through this mixer. This includes over $455 million stolen by the US-sanctioned, North Korea-sponsored Lazarus Group; over $96 million stolen during the June 24, 2022 Harmony Bridge Heist, and over $7.8 million from the August 2, 2022 Nomad Heist.
Tornado Cash is a cryptocurrency mixer that uses the Ethereum blockchain and allows for anonymous transactions by concealing their origin, destination, and other information. The platform mixes all received funds together before transferring them to their individual recipients. The stated purpose for this process is to increase privacy. However, cyber criminals commonly use such mixers for money laundering.
In connection with this case, the Dutch Fiscal Information and Investigation Service (FIOD) arrested a 29-year-old man in Amsterdam on August 10, 2022. The detainee was allegedly involved in concealing criminal financial flows and facilitating money laundering through Tornado Cash.
Source: US Department of the Treasury; FIOD, Netherlands
