According to Twitter user @0xdev0, on Monday, the Web3 Alchemy development platform and Infura.io they blocked remote procedure call (RPC) requests to the cryptocurrency mixer Tornado Cash, preventing users from accessing applications. The day before, the US Treasury listed 44 Tornado Cash-linked smart contract addresses on the Specially Designated and Blocked Persons (SDN) list. US individuals and entities are prohibited from blockchain or business interactions with Tornado Cash under the sanctions, with the potential for criminal liability for violations.
The move came after the US Treasury alleged that individuals and groups had used the privacy protocol to launder more than $7 billion in crypto since 2019, including $455 million stolen by the Lazarus Group, affiliated with North Korea. Almost immediately after the announcement, stablecoin issuer Circle froze USD Coin funds held within Tornado Cash smart contracts. Meanwhile, the GitHub programming repository removed the project’s home page and blocked developer access.
Vitalik Buterin, the co-founder of Ethereum, claimed that he used Tornado Cash to donate to Ukraine. The intention, Buterin said, was to protect the recipients’ financial privacy so that his enemy, the Russian government, would not have all the details of the transaction.
I’ll out myself as someone who has used TC to donate to this exact cause.
— vitalik.eth (@VitalikButerin) August 9, 2022
I will introduce myself as someone who has used TC to donate to this exact cause.
Others have also indicated mixer privacy applications, such as for an individual receiving a payment in cryptocurrency who does not want an employer to see their financial details, or a service payment in cryptocurrency who does not want the service provider to see past transactions from your wallet. On the other hand, the tool has acted, in part, as an access point to allow anonymous hackers to launder stolen funds from protocol exploits, particularly cross-chain bridges. To date, funds worth more than SUD 2 billion have been stolen from these types of applications.
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