On August 8, 2022, the US Department of the Treasury’s Office of Foreign Assets Control designated Tornado Cash, a virtual currency mixer, for laundering the proceeds of cybercrimes, including crimes committed against US victims. OFAC reports that Tornado Cash indiscriminately facilitates anonymous virtual currency transactions while making no attempt to determine their origin and is accused of laundering more than $7 billion worth of virtual currency since its creation in 2019. This includes the laundering of $455 million stolen by the Lazarus Group as part of the largest known virtual currency heist to date. The Lazarus Group, a state-sponsored hacking group in the Democratic People’s Republic of Korea (DPRK), was sanctioned by the United States in 2019. According to OFAC, Tornado Cash is also allegedly responsible for laundering more than $96 million from the June 24, 2022 Harmony Bridge Heist and approximately $7.8 million from the August 2, 2022 Nomad Heist.
Similar to OFAC’s designation of virtual currency mixer Blender.io on May 6, 2022, Tornado Cash was sanctioned by OFAC pursuant to Executive Order 13694, as amended, for providing material, financial or technological support to a cyber-enabled activity that originated outside of the US and contributed to a significant threat to the national security, foreign policy, or economic health of financial stability of the United States.
As a result of this designation, all property and interests in property of this designee within the United States or within the possession or control of a U.S. person are blocked, and U.S. persons are generally prohibited from engaging in transactions involving the designated person. In addition, entities owned 50 percent or more by one or more blocked persons are also blocked.