The U.S. Treasury Department announced on Friday that it has lifted sanctions on Tornado Cash, a cryptocurrency “mixer” accused of facilitating the laundering of more than $7 billion, including funds stolen by North Korean hackers. The decision follows legal challenges from six Tornado Cash users, who filed a lawsuit against the sanctions, supported by cryptocurrency exchange Coinbase.
In 2022, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) blacklisted Tornado Cash, claiming the firm had been involved in laundering cybercrime proceeds, including $455 million stolen by the Lazarus Group, a North Korean-backed hacking organization. Tornado Cash is designed to obfuscate the origins and recipients of cryptocurrency transactions, making it a popular tool for illicit activities.
Despite the sanctions being lifted, the Treasury reaffirmed its concerns over North Korea’s state-sponsored cyber activities, particularly its use of stolen digital assets to fund government operations. Treasury Secretary Scott Bessent emphasized the importance of protecting the digital asset industry from misuse by North Korea and other malicious actors.
The decision to lift the sanctions comes after a U.S. appeals court ruled in November that OFAC had overreached in its application of the sanctions. The Treasury indicated that the repeal followed a review of legal and policy issues, particularly in light of evolving technology and legal environments.
In 2023, two co-founders of Tornado Cash were charged with facilitating over $1 billion in money laundering, including laundering for the Lazarus Group. One of the co-founders, Roman Storm, is awaiting trial and has denied any wrongdoing. Additionally, Tornado Cash developer Alexey Pertsev was sentenced to five years and four months in prison in the Netherlands for his involvement in money laundering activities.
