U.S. lawmakers have called on the Treasury Department to intensify efforts to investigate illegal financial activities conducted through Tornado Cash.
Representative Sean Casten from Illinois sent a letter to the Treasury Department last week, with the co-signature of five other Democratic representatives, emphasizing the urgency of the issue.
Increased pressure to prosecute Tornado Cash
The letter, released today, focuses on the case of Tornado Cash co-founder Roman Storm. Prosecutors accuse Storm of using illegal funds to purchase various assets, including $3.1 million worth of real estate and a Tesla SUV.
In the content of the letter, Democratic representatives criticized Storm, emphasizing that he acknowledged the vulnerabilities in the platform's security system, making it easily exploitable without appropriate management measures.
"Although it has been sanctioned since 2022, Tornado Cash continues to operate as decentralized smart contracts. Lawmakers are seeking clarification on the number of transactions that have been conducted through this platform since it was sanctioned, and whether it has exacerbated the situation," Mario Nawfal wrote on platform X.
The letter also highlighted the significant role of Tornado Cash in major hacks, such as the Ronin Network attack.
"The co-founders of Tornado Cash claimed to implement a filter to prevent direct deposits from addresses designated by the Office of Foreign Assets Control (OFAC). However, as Storm acknowledged in an encrypted message, this filter is 'easily bypassed' due to a lack of effective anti-money laundering (AML) or know your customer (KYC) measures," Representative Casten wrote.
Tornado Cash: The center of legal controversy
In August 2022, the Treasury Department's OFAC sanctioned Tornado Cash, prohibiting U.S. individuals and businesses from interacting with this platform.
This decision has sparked much debate within the crypto community, with critics arguing that Tornado Cash, being essentially software, cannot be punished like an individual or organization.
The legal battle continues
The legal controversies surrounding Tornado Cash are far from over. In May of this year, developer Alexi Pertsev was sentenced to 5 years in prison by a Dutch court for laundering $2.2 billion through the platform. Pertsev is currently raising between $750,000 and $1 million to cover legal expenses.
Meanwhile, Roman Storm's trial has been postponed from December of this year to April of next year. He also called on the community to contribute to cover legal costs, estimated to reach $500,000 a month.
Privacy advocate Edward Snowden expressed support for Storm in January, emphasizing: "Privacy is not a crime."
Notable incidents related to Tornado Cash
Despite being sanctioned, Tornado Cash remains linked to recent high-profile cyber crimes. In September, hackers laundered $50 million in stolen cryptocurrency through this tool, related to security breaches at Penpie and WazirX.
Previously, the hacker behind the thefts at Poloniex and Kronos Research also transferred over $7.3 million through Tornado Cash.
These events continue to increase pressure on cryptocurrency mixing platforms, as global authorities strive to prevent their use for money laundering.
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