Treasury Urged to Investigate Crypto Mixers Like Tornado Cash
U.S. lawmakers are urging the Treasury Department to step up efforts to investigate illicit financial activity facilitated through Tornado Cash.
Illinois Rep. Sean Casten wrote a letter to the Treasury Department last week and was joined by five other Democratic representatives.
Big push to prosecute Tornado Cash
this letter Public disclosures earlier today highlighted the tornado cash Co-founder Roman Storm. Prosecutors allege Storm used illegal funds to acquire assets, including a $3.1 million home and a Tesla SUV.
In the letter, Democratic representatives took a closer look at Storm, claiming he acknowledged the platform’s lack of Safety measures and how easily they can be circumvented in the absence of regulatory measures.
“Even though it was sanctioned in 2022, it’s still doing its thing – operating as a decentralized smart contract. The crew wants to know how much the Tornado has moved since the sanctions, and whether it’s just making things worse Worse,” Mario Nofal wrote in a report. postal on X (formerly Twitter).
Additionally, the letter mentions Tornado Cash’s use of products such as Ronin cyber hacker attack.
“Tornado Cash co-founder announced a screen banning deposits directly from OFAC-designated addresses; however, as Mr. Storm admitted in an encrypted message, in the absence of any effective AML or KYC procedures, the screen “is very “Easy to dodge,” Sean Casten Wrote In a letter to the Treasury Department.
Back in August 2022, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) designated Tornado Cash as a sanctioned entity. This prohibits U.S. individuals and businesses from participating.
However, the decision sparked debate within the crypto community. For years, critics have argued that Tornado Cash, as software, cannot be sanctioned in the same way as individuals or entities.
Legal battle continues
The legal battle over Tornado Cash continues. Developer Alexei Pertsev sentenced to five years in prison May comes from a Dutch court. He was found guilty of laundering $2.2 billion through commingling. Pertsev is now raising $750,000 to $1 million for his legal defense.
Meanwhile, Roman Storm, whose trial was postponed from December to April, has also turned to crowdfunding for legal support. On social media, Storm asked for donations to cover mounting legal costs, which his defense team estimates will cost $500,000 a month.
privacy advocate Edward Snowden responds with support “Privacy is not a crime,” Storm said in January.
Despite the sanctions, Tornado Cash has been linked to recent high-profile cyber crimes. September, Hackers laundered $50 million Stealing cryptocurrencies through mixers. The funds were linked to breaches involving crypto projects such as Penpie and Indian Exchange WazirX.
Additionally, earlier this year, hackers were responsible for thefts from Poloniex and Kronos Research Raised over $7.3 million Via Tornado Cash. These developments highlight the cryptocurrency mixer As authorities around the world seek to crack down on its use to launder illicit funds.
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