US Lawmakers Urge Treasury to Target Crypto Mixers Like Tornado Cash

2024-11-20 10:28:11 Primitive Reading

From beincrypto by Mohammad Shahid

In Brief

Lawmakers urge Treasury to intensify scrutiny of crypto mixers, focusing on Tornado Cash.
Tornado Cash co-founders face legal battles over laundering billions in illicit funds.
Hackers continue to launder millions through the sanctioned platform.
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US lawmakers have urged the Treasury Department to ramp up its efforts in investigating illicit financial activities facilitated through Tornado Cash.

Rep. Sean Casten of Illinois wrote a letter to the Treasury last week, joined by five other Democratic representatives.

The letter publicly disclosed earlier today, highlights the case of Tornado Cash co-founder Roman Storm. The prosecutors are accusing Storm of using illicit funds to acquire assets including properties worth $3.1 million and a Tesla SUV.

In the letter, the Democrat representatives scrutinized Storm, claiming that he acknowledged the platform’s lack of security measures and how it was easily evadable in the absence of regulatory measures.

“Even though it got slapped with sanctions in 2022, it’s still doing its thing—operating as decentralized smart contracts. The crew wants answers on how much Tornado’s been moving since the sanctions and if it’s just making things worse,” wrote Mario Nawfal in a post on X (formerly Twitter).

Furthermore, the letter also referenced Tornado Cash’s significant role in major incidents like the Ronin Network hack.

“The Tornado Cash co-founders announced a screen to prohibit deposits directly from the OFAC-designated address; however, as Mr. Storm acknowledged in an encrypted message, the screen was “easy to evade” in the absence of any effective AML or KYC procedures,” Sean Casten wrote in the letter to the Department of Treasury.

Back in August 2022, the Treasury’s Office of Foreign Assets Control (OFAC) designated Tornado Cash as a sanctioned entity. This prohibited US individuals and businesses from engaging with it.

However, the decision sparked debate within the crypto community. Over the years, critics have argued that Tornado Cash, as software, cannot be sanctioned like a person or entity.

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