Following the outlawing of the crypto mixing service Tornado Cash by United States authorities, the platform has remained operational outside the country. However, it’s emerging that some entities in the US might ‘unknowingly’ be interacting with the blacklisted service.
Particularly, in a startling revelation on March 20, an X (formerly Twitter) user with the pseudonym “icebergy“, shared a screenshot detailing a Tornado Cash transaction.
In particular, the transaction involved the transfer of funds to BlackRock (NYSE: BLK), the world’s largest investment management firm based in the US.
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The transaction, shrouded in anonymity, has ignited speculation regarding its origin, with some suggesting potential involvement from North Korea. It’s intriguing to note that the amount in question involved approximately 1 ETH.
Potential BlackRock’s dilemma
It is worth noting that Tornado Cash, a protocol operating on the Ethereum (ETH) blockchain, is renowned for its role in anonymizing cryptocurrency transactions. However, its utilization has been a subject of scrutiny since August 2022 when the US Department of the Treasury blacklisted the protocol, rendering its usage illegal for US citizens, residents, and companies.
Furthermore, entities under US jurisdiction are prohibited from interacting with addresses associated with Tornado Cash, posing significant legal hurdles for companies like BlackRock.
Indeed, the transaction comes at a time, when BlackRock is heavily involved in the crypto space following the company’s recent rollout of spot Bitcoin exchange-traded fund (ETF).
North Korea, facing stringent economic sanctions may seek to evade these measures or gain access to restricted goods and services by transferring funds to a US company. This could serve as a strategy to circumvent sanctions or integrate illicitly obtained funds into the legitimate financial system.
North Korea’s exploitation of Tornado Cash
Overall, the implications of the transaction are exacerbated by the association of Tornado Cash with illicit activities. For instance, North Korean hackers, linked to the notorious Lazarus Group, have previously exploited Tornado Cash for money laundering endeavors.
The controversy surrounding Tornado Cash escalated in 2023 when developers of the privacy tool were charged by the US Department of Justice for facilitating hackers in laundering over $1 billion.
Roman Storm and Roman Semenov, key figures behind the tool, are currently facing charges of sanctions violations and money laundering. Storm has already been apprehended by US authorities and has been appealing for help to fight the charges.
