Feds Crank Up Heat on Tornado Cash With Link to North Korea's Nuclear Program
OFAC Says Sanctions are Part of Effort to Limit Development of Ballistic Missiles
By: Tarang Khaitan •Byte
The Biden Administration has raised the stakes in the Tornado Cash sanctions case by alleging the crypto mixer was involved in facilitating transactions connected to North Korea’s nuclear weapons program.
On Tuesday, the Office of Foreign Asset Control (OFAC) said it was sanctioning two individuals who work for Air Koryo, North Korea’s national air carrier, for “engaging in transportation and procurement activities” on behalf of the pariah Asian nation.
OFAC said the airline is controlled by North Korea’s military and the sanctions were made as part of Washington’s efforts to curb the development of ballistic missiles and nuclear weapons.
OFAC, which is part of the U.S. Treasury Department, said Tornado Cash helped conceal the movement of $455M worth of cryptocurrency stolen in March by the Lazarus Group, a black hat hacking outfit backed by Pyongyang.
“Today’s sanctions action targets two key nodes of the DPRK’s weapons programs: its increasing reliance on illicit activities, including cybercrime, to generate revenue, and its ability to procure and transport goods in support of weapons of mass destruction and ballistic missile programs,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson, in a statement. DPRK is the acronym for North Korea.
U.S. Permits Tornado Cash Users to Access Crypto Deposits
Authorities Say Users Need License to Retrieve Funds From Sanctioned MixerThe Defiant
On Aug.8, OFAC added privacy mixer Tornado Cash to its Specially Designated Nationals (SDN) list. This move made it illegal for US based entities to interact with smart contracts or wallets associated with the Tornado Cash protocol.
In October, Coin Center, a non-profit advocacy organization, filed a lawsuit against the U.S. Treasury Department challenging its authority to sanction Tornado Cash because it’s not a person or company.
Coinbase, the largest listed crypto exchange in the US,filed a similar lawsuit against the department. It argued that bad factors should be sanctioned, not code.