The U.S. Department of Justice (DOJ) recently unsealed an indictment charging the founders of Tornado Cash with a series of offenses related to money laundering and sanctions violations.
What is Tornado Cash?
Tornado Cash is a cryptocurrency mixer that facilitated the laundering of more than $1 billion in criminal proceeds, including transactions for the Lazarus Group, a sanctioned North Korean cybercrime organization.
This cryptocurrency mixer purported to offer users untraceable and anonymous financial transactions, allowing for the movement of funds without detection.
Ties to North Korea
The indictment reveals that Tornado Cash played a crucial role in laundering hundreds of millions of dollars for the Lazarus Group, a North Korean cybercrime organization.
The Tornado Cash co-founders allegedly knew of these transactions and received complaints from hacking victims, but failed to take any meaningful action to prevent further illicit activities.
Attempting to Conceal Sanctions Violations
In a deceptive move, Tornado Cash allegedly altered the service to make it appear compliant with sanctions laws.
While publicly claiming to adhere to these regulations, the founders privately acknowledged the ineffectiveness of this change.
They then continued to facilitate transactions for the Lazarus Group, even as the group’s activities violated international sanctions.
The indictment of the Tornado Cash co-founders sheds light on the sophisticated schemes employed by cybercriminals to exploit the anonymity and flexibility offered by cryptocurrencies.
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