On August 8, 2022, the official website of the Office of Foreign Assets Control of the US Department of the Treasury (OFAC) of the U.S. Department of the Treasury showed that part of the Tornado Cash agreement or related Ethereum Addresses that interact with each other will be placed in the SDN List (a list of nationals specially formulated by the United States).
It is reported that if added to this list, the persons on the list will be subject to various sanctions programs administered by OFAC, and the property and property rights of individuals or related entities will be frozen.
Tornado Cash, if you often read the articles of the Chengdu Lianan public account, you must have "heard a little" about the world's largest currency mixer platform, because we can always see this name in many hacking incidents, such as
$80 million stolen from Beanstalk Farms laundered through Tornado Cash;
After the OpenSea email phishing incident hackers sold part of the NFT obtained from the attack, they used the Ethereum privacy trading platform Tornado cash to launder 1,100 $ETH;
Ronin Network, a blockchain bridge, was stolen over $600 million in March, hackers transferred tens of millions of dollars worth of ether through Tornado Cash;
and what happened not long agoNomad Security Incident, Hackers also use Tornado Cash to mix coins. According to the data of Chengdu Lianan Blockchain Security Report, in the first half of 2022, about 1.1407 billion US dollars of stolen funds were transferred to Tornado Cash by hackers, accounting for about 60% of the total loss amount.
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The anonymous war of cryptocurrencies, what is currency mixing service and money laundering?
Before answering these questions, let's first understand currency mixing services and money laundering.
The transaction information of virtual currency is publicly available on the chain. As long as a person’s virtual currency address is known, all his operations on the chain are clearly visible and traceable. In this case, in order to solve privacy and anonymity issues, currency mixing technology was born.
Coin Shuffle is a decentralized privacy feature that allows users to quickly and efficiently mix funds with other users, creating random mappings between existing user accounts and new accounts after the coin shuffle , thereby achieving complete anonymity.
The function of currency mixing is to integrate several unrelated people and unrelated transactions into one transaction. At this time, it is unknown from the outside world which input transaction should correspond to which output transaction. To confuse the transaction, so as to achieve the real anonymous transaction.
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Why Do Hackers and Cybercriminals Love Tornado Cash Mixing Currency and Money Laundering?
Tornado Cash is a decentralized, non-custodial privacy solution for Ethereum and other smart contract-enabled blockchains based on ZK-SNARK (also known as Zero-Knowledge Succinct Non-Interactive Proof of Knowledge) technology. It can improve transaction privacy by breaking the on-chain connection between source addresses (depositors) and destination addresses (withdrawers).
Tornado Cash uses smart contracts to accept deposits of tokens from one address, and withdraw funds to a brand new address.
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Why was THREE's Tornado Cash, which laundered more than $7 billion, suddenly banned?
Tornado Cash has reportedly laundered more than $7 billion worth of virtual currency since its creation in 2019.
“Tornado Cash has long been the mixer of choice for cybercriminals, a platform that helps hackers, including those currently sanctioned by the U.S., launder their illicit sources of funds by obscuring the origin of their criminal proceeds,” said a senior U.S. department official.
In August 2021, Larry Harmon, CEO of bitcoin mixer Helix, pleaded guilty to money laundering charges for allegedly laundering 345,468 bitcoins (then equivalent to $300 million). Meanwhile, Harmon, which operates the Coin Ninja mixing service, was fined $60 million.
In April, the U.S. Department of Justice (DOJ), in cooperation with German authorities, seized the servers of Russian dark web site Hydra and imposed sanctions on the site.
It can be seen that the U.S. Department of the Treasury has been working to expose the criminal components of the virtual currency ecosystem, such as Tornado Cash andhttp://Blender.iosecondary title
Is the anonymity war of Web3.0 over? How to track funds after using mixed currency?
Although the ban affects the use of Tornado Cash, it is currently limited to the United States and its citizens, and users who use address hiding can also use Tornado Cash normally.
The last thing to mention is that the blockchain field is still in a stage of exploration and development. When it collides with the policy supervision of a sovereign state, it will inevitably be affected by many policy supervision levels. The frequent occurrence of fraud, money laundering, theft, and mining crimes caused by blockchain technology has put forward higher requirements for the risk prediction ability of the global regulatory system.
As a company dedicated to the construction of blockchain security ecology, Chengdu Lianan is also committed to the whole chain of combating virtual currency crime capacity building system, providing the whole chain of services + products to combat virtual currency crime.
Relying on the accumulation of experience in assisting law enforcement agencies to crack hundreds of blockchain crime cases (including several cases entered into Tornado), an intelligent research and judgment platform for virtual currency cases that fits the law enforcement agency's case-handling process—Chain Must chase. It can provide law enforcement agencies with on-chain clue discovery, on-chain behavior characterization, fund tracking and traceability, currency mixing penetration, investigation and evidence collection, case database and other one-stop virtual currency crime analysis, research and judgment technical and tactical capabilities to solve law enforcement agencies' confrontation with new virtual currencies. Pain points that are difficult to detect in criminal cases. If you encounter technical assistance needs in fund tracking and money laundering activities during the investigation of a case, you can contact us directly (law enforcement personnel only).
