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North Korea laundered a billion dollars through Tornado https://markets.businessinsider.com/news/currencies/north-korea-launder-treasury-ethereum-us-billion-san

North Korea laundered a billion dollars through Tornado https://markets.businessinsider.com/news/currencies/north-korea-launder-treasury-ethereum-us-billion-sanctions-tornado-cash-2022-8 https://markets.businessinsider.com/news/currencies/north-ko...

rattlesnakedave 4y ago
Money laundering is comprised of three parts: placement, layering, and integration. The government here is attacking the “layering” part of the process that tornado _may_ contribute to (the norks still have to explain how they ended up with a billion of ETH). But to truly be “money laundering” you have to have all three elements. The equivalent here would be banning casino chips or something.
- JumpCrisscross 4y ago
  > equivalent here would be banning casino chips or something If someone pays for a house with casino chips, and you don’t do your diligence on why they chose that mode of settlement, you’re rightfully exposed to legal risk if they were in fact laundering money.
BLKNSLVR 4y ago
If that's true, then it can't launder money very well can it? Definitely feels like a false narrative has been created by the fact they're able to point it out. Like pointing at someone and accusing them of hiding, but the very fact you can point them out means it's either not actually happening or not happening very effectively.
- fogof 4y ago
  Anyone can see what amount of money one address has put into Tornado Cash, so it’s no surprise that we can estimate how much money North Korea has put in. The whole reason they do put that money in, though, is so that they can have a different account take that money out, and have it not be clear where the money came from. For a sanctioned country, that output seems much more spendable.
- nl 4y ago
  It was very effective. The money went in, and no-one knows where it came out. BUt you can bet it went into thousands of clean, untainted wallets which were then used to cash out.
  - from 4y ago
    Yes, Tornado allows you to obtain ETH that is divorced from the original (potentially criminal) source. But exchanges and anyone with a block explorer can still see that your clean wallet received 100 ETH from the Tornado withdrawal address. Exchanges in America at least are supposed to consider accounts receiving funds from mixers as "high risk" and apply extra scrutiny/shut down accounts. There are exchanges in Hong Kong and most of the former Soviet Union that ignore these kind of rules but Tornado still doesn't really "clean" the money in the sense of giving you readily spendable money in a bank account. I guess it may be useful in the process of doing so.
    - nl 4y ago
      It's extremely useful. > Exchanges in America at least are supposed to consider accounts receiving funds from mixers as "high risk" and apply extra scrutiny/shut down accounts. I believe there's a level (I think $3000) for the "travel rule"[1] to apply. It's obviously easy to bounce the money through some "NFT sales" too if you want. [1] https://www.fincen.gov/sites/default/files/advisory/advissu7.pdf https://www.fincen.gov/sites/default/files/advisory/advissu7...
boc 4y ago

rattlesnakedave 4y ago

Money laundering is comprised of three parts: placement, layering, and integration. The government here is attacking the “layering” part of the process that tornado _may_ contribute to (the norks still have to explain how they ended up with a billion of ETH). But to truly be “money laundering” you have to have all three elements. The equivalent here would be banning casino chips or something.

JumpCrisscross 4y ago
> equivalent here would be banning casino chips or something If someone pays for a house with casino chips, and you don’t do your diligence on why they chose that mode of settlement, you’re rightfully exposed to legal risk if they were in fact laundering money.

BLKNSLVR 4y ago

If that's true, then it can't launder money very well can it? Definitely feels like a false narrative has been created by the fact they're able to point it out. Like pointing at someone and accusing them of hiding, but the very fact you can point them out means it's either not actually happening or not happening very effectively.

fogof 4y ago
Anyone can see what amount of money one address has put into Tornado Cash, so it’s no surprise that we can estimate how much money North Korea has put in. The whole reason they do put that money in, though, is so that they can have a different account take that money out, and have it not be clear where the money came from. For a sanctioned country, that output seems much more spendable.
nl 4y ago
It was very effective. The money went in, and no-one knows where it came out. BUt you can bet it went into thousands of clean, untainted wallets which were then used to cash out.
- from 4y ago
  Yes, Tornado allows you to obtain ETH that is divorced from the original (potentially criminal) source. But exchanges and anyone with a block explorer can still see that your clean wallet received 100 ETH from the Tornado withdrawal address. Exchanges in America at least are supposed to consider accounts receiving funds from mixers as "high risk" and apply extra scrutiny/shut down accounts. There are exchanges in Hong Kong and most of the former Soviet Union that ignore these kind of rules but Tornado still doesn't really "clean" the money in the sense of giving you readily spendable money in a bank account. I guess it may be useful in the process of doing so.
  - nl 4y ago
    It's extremely useful. > Exchanges in America at least are supposed to consider accounts receiving funds from mixers as "high risk" and apply extra scrutiny/shut down accounts. I believe there's a level (I think $3000) for the "travel rule"[1] to apply. It's obviously easy to bounce the money through some "NFT sales" too if you want. [1] https://www.fincen.gov/sites/default/files/advisory/advissu7.pdf https://www.fincen.gov/sites/default/files/advisory/advissu7...

boc 4y ago