North Korea Laundered $7 Billion In Crypto On Tornado Cash, US Treasury Slams The Platform With Sanctions

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Kim Jong-Un Supreme Leader of North Korea
Kim Jong-Un Supreme Leader of North Korea

The US Treasury Department’s Office of Foreign Asset Control on Monday sanctioned crypto platform Tornado Cash, which North Korean hackers have used for laundering. 

The sanctions interdict any Americans or American entities from using Tornado Cash. The government said the crypto platform has been beneficial to cyber-criminals, who have relied on it to launder $7 billion in crypto. 

“Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks,” said Brian Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, in a statement.

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According to a separate estimate from TRM Labs, North Korea has laundered roughly $1 billion in stolen funds through Tornado Cash. 

“Today’s sanctions against Tornado Cash is a watershed moment, not only for the crypto industry, but for financial sanctions writ-large as it targets, as, opposed to prior sanctions, a widely used mixing service and, potentially, answers the question of whether or not US regulators and law enforcement are going to tolerate the use of mixers to launder illicit proceeds,” Ari Redbord, head of legal and government affairs at TRM Labs, told Insider in emailed comments.

Redbord also added that North Korea is a cash-strapped government with minimal export revenues, so cryptocurrency laundering has an exceptionally high upside for the nation’s bad actors and could be used to fund weapons programs. 

In April, Redbord told Business Insider that North Korean groups had launched several online attacks, but they’ve become highly sophisticated as time passed. 

“Over the last year or so, we’ve moved from a post 9/11 world into a new digital battlefield,” he said previously. “Nation-state actors know to go after crypto businesses to fund real weapon proliferation. It’s not just some hackers trying to fund a lifestyle.”