Circle Internet Financial Ltd., the issuer of the USDC stablecoin, froze over 75,000 USDC in funds linked to 81 sanctioned addresses at the cryptocurrency mixer Tornado Cash on Monday, according to data from crypto aggregator Dune Analytics.
- The U.S. Treasury Department banned all U.S. persons and entities from using Tornado Cash on Monday, alleging the service facilitates money laundering.
- Treasury’s Office of Foreign Assets Control added the mixer to its Specially Designated Nationals list, claiming it had laundered more than US$7 billion worth of crypto since 2019.
- A cryptocurrency mixer is a service that allows users to feed crypto into a large pool and withdraw the same amount — minus a fee — to multiple wallets to obscure the sources of the original tokens.
- It has been reported that Tornado Cash is used by the North Korean state-backed Lazarus Group, which was responsible for the US$620 million hack of Axie Infinity’s Ronin Network.
- Circle and Tether Limited Inc., the issuer behind leading stablecoin USDT, are able to freeze transfers of their stablecoins on the Ethereum smart contract level to and from Tornado Cash.
- The amount sent to cryptocurrency mixers reached an all-time high of US$51.8 million in April 2022, according to a report by blockchain data analyst firm Chainalysis.