US removes sanctions against Russian crypto service facilitating sanctions circumvention

The US Office of Foreign Assets Control (OFAC) has removed the Tornado Cash crypto service from the list of sanctioned entities and eased sanctions against its Russian founder.

Source: OFAC in a statement on its website

Details: The OFAC noted that Tornado Cash has been removed from the Specially Designated Nationals (SDN) list.

This list contains individuals and entities that are blocked under various sanctions programmes.

Ukrainian news outlet Liga.net reported that Tornado Cash is an Ethereum-based cryptocurrency mixing service. In August 2022, the US Department of the Treasury added Tornado Cash to the SDN list, accusing it of laundering more than US$7 billion, including US$455 million stolen by the North Korean hacker group Lazarus.

The cryptocurrency service was founded by Roman Semenov, a Russian national wanted by the FBI for money laundering.

The FBI reported that Semenov and his associates, who operate the Tornado Cash service, likely facilitated hundreds of millions of dollars in sanctions-violating transactions by helping the Lazarus Group transfer criminal proceeds from a cryptocurrency wallet designated as blocked property by the OFAC.

Semenov remains on the US sanctions list under measures targeting North Korea but has been removed from the list of persons engaged in significant malicious cyber activity.

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