Tuesday, September 27, 2022

Tornado Cash: America banned a smart contract for the first time

In an update to the sanctions list, the United States Treasury Department has listed an Ethereum smart contract for the first time. Tornado Cash is said to have laundered more than $7 billion since 2019, with negotiations with the protocol now being criminalized.

The allegation in a press release from the Office of Foreign Assets Control (OFAC) at the US Treasury Department pertains to the Tornado Cash Mixer service on the Ethereum blockchain. The protocol promises complete privacy for users by allowing Ether (ETH) to be moved between addresses anonymously. Tornado Cash has already blocked various cryptocurrency addresses in the web-based frontend since OFAC linked the transaction with North Korean hacker group Lazarus. However, the open source code is stored in an immutable smart contract, which is subject to restrictions in a one-time case to the authorities.

public currency mixer

Tornado Cash is an Ethereum-based currency mixer that allows completely anonymous transactions. The origin, destination and counterparties are deliberately concealed in order to protect the financial freedom of the users. Tornado receives a multitude of transactions and mixes them together before forwarding the protocol to each recipient. While the real purpose is to protect the privacy of users, blenders are often used by illegal actors to launder money.

Now, Whirlwind smart contracts are fully approved. According to the press release, the organization is engaged in cyber-enabled activities that are likely to pose a significant threat to national security. The company is said to have contributed significantly to the significant misappropriation of funds. In addition, Tornado Cash used economic resources, trade secrets, personal identifiers or financial information to gain a commercial or competitive advantage.

Approval of a smart contract for the first time

The sanctions would prohibit US individuals, including US financial institutions, from transacting using the protocol’s public smart contracts. Prohibited transactions include trading or financial transactions as well as providing liquidity on Tornado Cash. This could criminalize a broader group of Ethereum users who have used the protocol to protect their anonymity or curiosity.

“Despite public opposition to the contrary, Tornado Cash has repeatedly failed to establish effective controls to prevent routine money laundering for malicious cyber actors without fundamental measures to manage their risks. Treasury The department will continue to aggressively crack down on mixers that launder virtual currencies for criminals and those who support them.” –Brian E. Nelson, Under Secretary of the Treasury Department of Terrorism and Financial Intelligence

The GitHub coding platform has already responded to the restrictions and removed the official open source code. In addition, Roman Semenov – the developer and co-founder of Tornado Cash – had his account suspended. Other code contributors may also be affected.

Nation World News Desk
Nation World News Deskhttps://nationworldnews.com
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