Tornado Cash Ban Updated by OFAC

U.S. Department of the Treasury redesignated Tornado Cash under two executive orders. The update is based on additional information regarding the use of crypto mixer for aiding North Korea's WMD program.

Digital rendering of red missile over blue water

United States Department of the Treasury (USDT) updated its sanctions against Tornado Cash. In a release on its website, the institution pointed to the crypto mixer's role in North Korea's weapons of mass destruction (WMD) and ballistic missile programs.

In August, Tornado Cash – a decentralized tool having a legitimate use as a privacy service – was outlawed for laundering the proceeds of cybercrimes and failing to impose effective controls to prevent abuse.

Allegedly, the mixer helped launder more than $7 billion worth of cryptocurrencies since its inception in 2019. Tornado Cash allowed users to deposit and withdraw ERC-20 tokens and ether via a smart contract-based solution obfuscating the connection between deposit and withdrawal addresses.

In Tuesday's announcement, USDT's Office of Foreign Assets Control (OFAC) informed about redesignating Tornado Cash under two executive orders: 13722 and 13694.

"The redesignation takes into account additional information and also includes an additional basis for the designation of Tornado Cash regarding its support for Democratic People's Republic of Korea activities," reads the release.

Allegedly, Tornado Cash allowed to obscure the trail of $455 million stolen by the DPRK-controlled Lazarus Group in what is considered the largest virtual currency heist to date.