OFAC SANCTIONS NOTORIOUS VIRTUAL CURRENCY MIXER – TORNADO CASH

On 8 August, OFAC announced that it had sanctioned virtual currency mixer Tornado Cash, which has been used to launder more than $7 billion worth of virtual currency since its creation in 2019.  This includes over $455 million stolen by the Lazarus Group, a Democratic People’s Republic of Korea (DPRK) state-sponsored hacking group.  Tornado Cash is a virtual currency mixer that operates on the Ethereum blockchain and indiscriminately facilitates anonymous transactions by obfuscating their origin, destination, and counterparties, with no attempt to determine their origin.  Criminals have increased their use of anonymity-enhancing technologies, including mixers, to help hide the movement or origin of funds. The sanctions mean that all property and interests in property of Tornado Cash that is in the US or in the possession or control of US persons is blocked and must be reported to OFAC.  In addition, any entities that are owned, directly or indirectly, 50% or more by one or more blocked persons are also blocked.  All transactions by US persons or within (or transiting) the US that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific licence issued by OFAC, or exempt.  These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person.

https://home.treasury.gov/news/press-releases/jy0916

https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220808

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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