The Office of Foreign Asset Control, or OFAC, of the US Treasury Department, has amended the sanctions on cryptocurrency mixer Tornado Cash and added two people to its list of Specially Designated Nationals who are engaged in “transportation and procurement activities” for the Democratic People’s Republic of Korea.
The Department of the Treasury stated that it had “delisted and simultaneously redesignated” Tornado Cash on November 8 in addition to using Ri Sok and Yan Zhiyong, two North Korean citizens, as part of its justification for sanctions.
According to OFAC, Tornado Cash has been used to “launder more than $7 billion worth of virtual currency” since its launch in 2019. Only $1.5 billion of the transactions, according to crypto analytics firm Elliptic, were connected to illegal activity or money laundering. The majority of transactions were made for legitimate reasons.
However, the North Korean state-sponsored cyber organisation Lazarus used Tornado Cash to launder more than $96 million in cryptocurrencies after the Harmony Bridge incident in June which was condemned by the OFAC. The government department further reaffirmed its allegations that the crypto mixer was involved in the laundering of a total $455 million in cryptocurrency that had been stolen by the Lazarus Group.
Tornado Cash has been reclassified, thereby replacing Treasury’s proceedings against the cryptocurrency mixer in August that established sanctions for its role in “supporting destructive cyber activities, which ultimately enable the DPRK’s weapons of mass destruction] programme. The Lazarus Group was included in the initial sanctions, but linkages to North Korea’s nuclear programme were not made obvious.
These sanctions action, according to Brian Nelson, Under Secretary of the Treasury for terrorism and financial intelligence, targets North Korea’s ability to obtain and transport goods for its nuclear program and ballistic missile program. It will also cut its growing reliance on illegal activities, including cybercrime, to generate revenue.