Earlier this month, the U.S. Treasury Department approved a ban on Tornado Cash, a crypto-privacy tool that mixes funds from different users to hide the original source of crypto funds. Authorities charged the mixer company with helping bad actors launder more than $7 billion in digital assets since its founding in 2019.
As cryptocurrencies have gained a lot of hype around the world, it has also raised issues such as money laundering and bad actors using them due to their anonymous nature. Likewise, the space has alerted and engaged government authorities to prevent illicit money transfers.
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As a result, law enforcement has been imposing sanctions on privacy tools that undermine the privacy of other users.
Criticism of the cryptocurrency-oriented company emerged after authorities restricted Tornado a few weeks ago, with at least one lawmaker expressing support for the mixer company. Lawmakers urged the restrictions could harm the privacy of U.S. users, as local users also take advantage of privacy tools to keep them safe online.
Crypto mixer services circulate users’ crypto funds from multiple crypto platforms and other users’ asset pools to hide transaction details and users associated with them.
This isn’t the first blending company charged by U.S. law enforcement, as authorities already hinted at sanctions against North Korean blending firm Blender.io in May. Officials claim they found the company involved in helping the North Korean hacking group Lazarus, which carried out a $600 million heist against the Ronin Bridge network in March.
Sanctions on Tornado Cash also undermine national security
More and more people are turning to internet security tools. For many, Tor and VPNs is the preferred privacy tool, but the crypto community has different tools that ultimately accomplish the same task: ensuring privacy.
meets the accuse Tornado Cash from the U.S. Treasury Department’s Office of Foreign Assets Control has opened the way for hackers to launder more than $96 million in stolen funds. Officially, the funds belonged to the Nomad cryptocurrency heist in August and the Harmony blockchain heist in June.
Citing the sanctions imposed, the non-profit cryptocurrency advocacy platform Coin Centre, think The force of the law surpassed their legal powers, paving the way for violations of “the constitutional rights to due process and freedom of speech.”
Congressman Tom Emmer, who received a $50,000 donation from the Blockchain Association this year, sent a note this week to Treasury Secretary Janet Yellen asking for the release of Tornado Cash’s rationale. He further added that the sanctions undermine national security and affect “the privacy rights of every American citizen.”
Another major crypto project, Tether, has also expressed support for Tornado, refusing to freeze Tornado’s accounts on its network, saying it intends to keep them.
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On the other hand, a Treasury representative said the agency’s goal is simply to disrupt criminal activity and will use its sanctions powers to prevent illicit activities such as money laundering and cyber theft in the financial system.
Statements in support of Tornado Cash emerged after Dutch authorities arrested the company’s developer in August; the U.S. imposed sanctions days later, accusing it of facilitating money laundering.
Featured image from Pixabay and chart from TradingView.com
