By Christopher Bing and Daphne Psaledakis
WASHINGTON (Reuters) - The United States on Monday imposed sanctions on virtual currency mixer Tornado Cash, accusing it of helping hackers, including from North Korea, to launder proceeds from their cyber crimes.
A senior Treasury Department official said Tornado Cash, one of the largest mixers identified as problematic by the Treasury, has reportedly laundered more than $7 billion worth of virtual currency since it was created in 2019.
The Lazarus Group, a well-known North Korean government-backed hacking group that has conducted numerous data breaches, both politically and sometimes financially motivated, has laundered at least $455 million through Tornado Cash, the Treasury said. The Lazarus Group is under U.S. sanctions.
The United States and South Korea have said North Korea has mobilized thousands of hackers to steal funds including cryptocurrencies to finance its weapons programs. North Korea denies the allegations.
Tornado Cash was also used to launder about $100 million after the June Harmony heist and as recently as last week in the Nomad theft, the Treasury said.
Despite requests for Tornado Cash to make changes, the criminal activity continued, the official said, leading to the decision to designate the mixer.
In May, the U.S. Treasury targeted Blender, imposing sanctions for the first time on a virtual currency mixer - a software tool that pools and scrambles cryptocurrencies from thousands of addresses - and said it would continue to investigate the use of mixers for illicit purposes.
Hacks have long plagued crypto platforms.
Reuters could not immediately reach Tornado Cash for comment.
(Reporting by Daphne Psaledakis, Christopher Bing and Ismail Shakil; editing by Grant McCool)