Despite all the cognitive capabilities in their arsenal, human beings have never really managed to not make a mistake every now and then. This dynamic has been put on display quite a few times throughout our history, with each representation practically forcing us to look for a defensive cover. To the world’s credit, it will find that exact cover as soon as it brings dedicated regulatory bodies into the fold. Having a well-defined authority within each and every area altered the entire picture, considering the development wasted no time in compensating for a lot of our flaws. Nevertheless, the whole runner was also ridiculously short-lived, and if we are being honest, it was all technology’s fault. You see, the moment technology and its layered took over the scene; it gave people an unprecedented shot at exploiting others, while also doing a lot to shield them from the consequences of their actions. Such a reality expectantly overwhelmed our governing forces, and consequentially, sent us back to square one. Fortunately enough, though, the cookie is crumbling once again, and going by some recent cases, it might just soon fall into the favor of our regulatory bodies, at least that’s the impression we get from a new set of sanctions.
The US Department of the Treasury has officially added Tornado Cash crypto mixer to its list of sanctioned organizations. According to certain reports, the sanctions centre upon Tornado Cash’s role in laundering cryptocurrency stolen during major hacks, especially those linked to North Korean hacking groups. Fair enough, in March, a whopping $625 million were stolen from the blockchain behind the Axie Infinity crypto game and laundered through Tornado Cash. The decision makes Tornado Cash the second crypto mixer to be exiled from US financial system, with Blender becoming the first one back in May. Now, while a full-fledged ban might seem like too aggressive of a punishment, the mixer’s consistent oversight within the stated context meant that it was coming sooner or later.
“Today, Treasury is sanctioning Tornado Cash, a virtual currency mixer that launders the proceeds of cybercrimes, including those committed against victims in the United States,” said Brian E. Nelson, undersecretary of the Treasury for terrorism and financial intelligence. “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.”
The lack of traceability associated with such mixers has long made them an attractive prospect for criminal gangs. A report from blockchain analysis firm, Chainalysis confirms the same by stating how the use of crypto mixers has reached a record high, but at the same time, this traffic is largely coming wallet addresses linked to cybercrime.
Coming back to Tornado Cash, although the mixer will have to do a ton, it can still make a comeback by establishing complete compliance with the regulations.