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US-Sanctioned Money Laundering Tool Tornado Cash Used by Vitalik Buterin for Ukraine Relief

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Ethereum co-founder Vitalik Buterin has admitted that he uses mixing service Tornado Cash, which has just been sanctioned by the US government.

On Monday, the U.S. Treasury Department announced that it had barred US citizens and companies from using the platform, accusing of it of helping hackers including the infamous Lazarus Group to launder proceeds from their criminal activities.

Tornado Cash is a smart contract mixer built on Ethereum. It enables users to maintain their anonymity on the blockchain by “mixing” potentially identifiable and/or corrupted funds with other legitimate funds to obfuscate the source and destination addresses.

While the platform is known to be utilised by hackers to launder their proceeds, it can also be used to protect the identities of vulnerable communities that may require financial privacy.

In a tweet on Tuesday, Buterin said that he used Tornado Cash to donate to Ukraine’s defence efforts in its war with with Russia, with the intent of “protecting the recipients.”

Chainalysis estimates that Tornado Cash has received over US$7.6 billion worth of Ethereum since its inception in 2019, the majority of which have come from illicit or high-risk sources. Hackers behind the recent exploit have also started sending stolen tokens through Tornado Cash.

Meanwhile, an anonymous troll has sent a number of Tornado Cash transactions to some celebrity-owned Ethereum addresses after the US Treasury Department announcement.

According to Etherscan, wallets include those controlled by Coinbase CEO Brian Armstrong, TV host Jimmy Fallon, Youtuber Logan Paul, and NFT artist Beeple.