By George Ward
The US Treasury has placed a new restriction on Tornado Cash. This was after allegations revealed the government of North Korea was using the platform.
In a recent statement, the US Treasury revealed that it was revising the restrictions on the crypto mixer. According to the department, North Korea had used the mixer to gain financial, technological, and material support.
The United States alleged that the mixer fosters illegal cyber-crimes in foreign territories. For example, the Lazarus Group transferred $455 million worth of stolen crypto in March using Tornado Cash.
The Office of Foreign Asset Control (OFAC) also revealed on November 8th that it would delist and redesignate the mixer. This is due to claims that North Korea utilized it to launder $100 million worth of crypto.
The fund was repeatedly used to fund the country’s WMD (weapons of mass destruction) program. This program focuses on the creation of ballistic missiles.
“This step is part of the US efforts to stop the activity of the DPRK in developing WMD and ballistic missiles. However, this is also a breach of the United Nation’s Security Council rulings,” the report stated.
Therefore, the sanctions aim to stop the country’s production of WMD. Recently, North Korea launched missiles which sparked alarm in South Korea and Japan.
According to Nelson, the initiative allowed the sourcing and transportation of deadly missiles. Furthermore, the group depended on illegal activities, especially cybercrime, to sponsor its nefarious activities.
US Treasury Sanctions Two Individuals With Link To Air Koryo
Meanwhile, the department placed restrictions on two individuals. The individuals were linked to Air Koryo, North Korea’s national carrier. Both steps aim to halt the country’s nuclear weapon development.
In September, the Treasury’s website revealed that founders, Tornado Cash users, DAO members, and developers were not under sanctions. Instead, the sanction stops individuals from using the platform to conceal crypto transactions.
However, the crypto community reacted to the August sanctions. First, they stressed that the Treasury was overstepping its boundaries.
Coin Center even sued the department after receiving backing from Coinbase. Meanwhile, the total amount locked in the protocol is about $200 million.
Meanwhile, crypto industry leaders such as GTON Capital’s Alex Pipushev and PureFi’s Slava Demchuk condemned the sanctions. Demchuk said the department was showing its strength in the crypto sector.
Pipushev noted that regulators could not stop the functionality of the protocol. Hence, they have resorted to blocking the website and addresses linked to it.
According to the Treasury, people participating in transactions with sanctioned entities will be penalized. Furthermore, the agency stated that any institution facilitating large transactions or providing services for sanctioned entities would face US penalties.