In November, the federal appeals court ruled that the executive branch’s authority to “block ‘property’ in which a foreign ‘national’ or ‘person’ has an ‘interest’” did not apply in the case of Tornado Cash because its immutable smart contracts — lines of autonomous code on the blockchain intended to preserve anonymity in transactions — do not qualify as property. Prosecutors contended that Tornado Cash laundered $1.2 billion worth of cryptocurrency stolen through at least 36 hacks — including the theft of more than $600 million from the game Axie Infinity in March of 2022 and some $275 million from the crypto exchange Kucoin, both by North Korea’s Lazarus Group hackers. Even as the sanctions have been in place, Tornado Cash has continued operation, with some researchers finding evidence that North Korean hackers are still using it to launder the billions worth of cryptocurrency they steal each year. A Dutch court last year found the cofounder of the anonymizing cryptocurrency service Tornado Cash guilty of money laundering, sentencing him to five years and four months in prison. A popular platform accused of laundering cryptocurrency stolen by North Korean state hackers and cybercriminals was removed Friday from the U.S. sanctions list after winning an appellate court decision in November. In November, a U.S. federal appeals court reversed a decision about Tornado Cash, deciding that the Treasury had exceeded its authority in imposing sanctions. For years, Tornado Cash was the go-to place for ransomware gangs and cryptocurrency platform hackers to launder their illicit funds and effectively cash out their earnings. The Treasury Department said it was dropping Tornado Cash from the Specially Designated National and Blocked Persons (SDN) list, where it had been since 2022. In his opinion, Judge Don Willett of the 5th U.S. Circuit Court of Appeals pointed to limitations in the International Emergency Economic Powers Act (IEEPA), the 1977 law granting the executive branch the authority to freeze assets of a foreign actor on national security grounds. A Tornado Cash developer, Alexey Pertsev, was sentenced in May to more than five years in prison in the Netherlands for money laundering. “We remain deeply concerned about the significant state-sponsored hacking and money laundering campaign aimed at stealing, acquiring, and deploying digital assets for the Democratic People’s Republic of Korea (DPRK) and the Kim regime,” the department said. The cryptocurrency mixer had been accused of helping North Korean hackers launder more than $455 million in stolen coins. The Treasury previously accused Tornado Cash of laundering more than $7 billion since it launched in 2019.
This Cyber News was published on therecord.media. Publication date: Fri, 21 Mar 2025 16:05:20 +0000