By offering cryptocurrencies, an Internet user trapped several celebrities

Tornado Cash, a cryptocurrency mixer popular with hackers, has been banned in the United States. To demonstrate the absurdity of the ban, a netizen tricked several celebrities through the Ethereum blockchain. Explanations.

On August 8, 2022, the United States placed Tornado Cash blacklisted. Well known to hackers, Tornado Cash is a cryptocurrency mixer. Services of this type make digital currency transactions completely anonymous.

Mixers are widely used in money laundering operations. Without this precaution, it is easy to trace the source of the funds by consulting the blockchain. Indeed, the blockchain keeps track of all transactions made in a public ledger. To prevent the authorities from going back to them, cybercriminals pass their cryptocurrencies, resulting from a ransom or a hack, on a blender.

“Despite publicly claiming otherwise, Tornado Cash has repeatedly failed to impose effective controls to prevent malicious actors from routinely laundering funds. », said US Treasury Department spokesman Brian Nelson in a statement.

Aware of the practices of hackers, the Treasury Department has therefore announced measures against Tornado Cash. The service has been added to the list of companies sanctioned for money laundering. Now, Americans are no longer allowed to visit the mixer or open an account there.

Note that Tornado Cash is not the first blender to find itself in the sights of the US Treasury. Last May, the United States decreed similar sanctions against, another popular mixer. The American authorities do not intend to stop there. The Treasury undertakes to actively pursue actions against mixers that launder virtual currency for criminals”.

Also read: Hackers siphoned over $150 million in cryptoassets from BitMart

More than 7 billion dollars of cryptocurrencies laundered in 3 years

In details, the Treasury has added several Ethereum addresses belonging to the mixer to the Specially Designated Nationals (SDN). This list includes thousands of entities with which it is prohibited to interact. At the request of the American authorities, Circle, the company that issues the USDC stablecoinhas also frozen the funds held on several addresses under the control of Tornado Cash.

According to the US Treasury, Tornado Cash “has been used to launder over $7 billion worth of virtual currency since its inception in 2019”. The United States claims that Tornado Cash is among the tools used by the Lazarus group to cover his tracks. Hackers allegedly laundered over $455 million through the blender.

Piloted by North Korea, the Lazarus hackers are suspected to be behind the hacking of the Harmony blockchain and the Ronin blockchain. During this last operation, the criminals flew away with over $624 million in cryptocurrencies. Some of the stolen currency passed through the Tornado Cash mixer, the statement claims.

According to the Treasury, the mixer was also used in the Nomad hack, one of the protocols for connecting blockchains. By exploiting a loophole, a plethora of attackers managed to siphon off $190 million. Subsequently, $9 million was recovered.

The Absurdity of Banning Tornado Cash

A mysterious Internet user took the opportunity to set up a trap. As our colleagues from CoinDesk report, an individual transferred cryptocurrency to the portfolio of several celebrities through Tornado Cash.

By consulting the Ethereum blockchain, we see that the funds have been paid into the wallets of jimmy fallonfamous TV presenter, Brian Armstrongfounder of the Coinbase platform, or the artist Beeple, which rose to prominence through its non-fungible tokens (NFTs). Currencies were also sent to the wallets of the Puma brand or a collection fund intended for Ukraine. Transfers contain 0.1 ETH, i.e. after 160 euros. Following the ban on Tornado Cash in the United States, these transfers obviously risk drawing the attention of the American authorities to the wallets.

The idea for this operation apparently originated on Twitter, reports CoinDesk. Shortly after the blender was banned, an account called depression BTC announced that it had accumulated a list of Ethereum addresses belonging to known users. He then announces that he intends to send cryptocurrencies there through the mixer.

In some cases, users relied on Ethereum Name Service, a service developed on the Ethereum blockchain that allows you to buy .eth domain names. Thanks to this personalized name, it was easy to trace the identity of the owners of an address. Many personalities, such as Anthony Hopkins or Jimmy Fallon, have opted for this service. Some even took over this domain name on Twitter.

This hoax seeks to demonstrate the futility of sanctions against Tornado Cash. As shown by the internet user, it is not not possible to refuse a transaction from the mixer. Yet this is what US law requires, completely out of step with the operation of the blockchain.

In addition, it will be recalled that Tornado Cash is open source. The full mixer code is available on Github. De facto, anyone is free to launch their own version of the mixer, even if the addresses linked to the original version have been blacklisted.

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