According to the project’s official Twitter account, Tornado
Cash, the ethereum mixing service that allows participants to shuffle
ether, is blocking flagged ethereum addresses listed on the Office of
Foreign Assets Control’s (OFAC) Specially Designated Nationals And
Blocked Persons list (SDN). The decision follows the recent OFAC update,
that lists the Ronin exploiter’s ethereum address, and further notes
that the ether wallet is allegedly associated with the infamous North
Korean hackers, Lazarus Group.
Ethereum Mixer Tornado Cash Blocks OFAC Sanctioned Addresses
Tornado Cash announced on April 15, 2022, that the project is
leveraging a Chainalysis oracle to block OFAC sanctioned wallets.
“Tornado Cash uses [a] Chainalysis oracle contract to block OFAC
sanctioned addresses from accessing the dapp,” the official Twitter
account said
on Friday. “Maintaining financial privacy is essential to preserving
our freedom, however, it should not come at the cost of non-compliance,”
the Tornado Cash Twitter account added.
The decision comes after the U.S. Treasury and OFAC published an update
concerning the Ronin bridge hacker’s ethereum wallet. The ethereum
address that was used by the Ronin bridge exploiter is now sanctioned
and U.S.-based companies and citizens are banned from transacting with
the address. According to the OFAC update, the address is associated
with the North Korean hacking organization known as Lazarus Group.
Following the decision, Tornado Cash got a lot of criticism for the move.
“So let me get this straight,” one individual tweeted,
“if my address is on the OFAC sanctioned addresses list, I just need to
transfer it to another address and then I can begin my money
laundering.”
The news also follows the controversy surrounding the claims that the
blockchain surveillance and intelligence company, Chainalysis, deanonymized
Wasabi-based Coinjoin transactions. After the deanonymizing claims,
Wasabi told the public a blacklist would prevent some UTXOs (unspent
transaction outputs) from registering to Coinjoin transfers. The founder
and creator of Wasabi wallet, Adam Ficsor, told the public: “Blacklisting arrived to Coinjoins. IMO it is a major setback to Bitcoin’s fungibility.”
Meanwhile, the changes Tornado Cash added may be bypassed by not only
simply switching to other ether addresses, but also by leveraging the
contract without using the Tornado Cash protocol’s frontend. “Don’t
worry guys, your favorite hackers will still be able to wash the money
they have stolen from you using the smart contract directly,” one
individual replied to the Tornado Cash Twitter statement. “This just affects the website frontend, contract is permissionless.”
