1095. Who is the Tornado Cash “person” that OFAC designated pursuant to E.O. 13722 (“Blocking Property of the Government of North Korea and the Workers’ Party of Korea, and Prohibiting Certain Transactions with Respect to North Korea”) and Executive Order (E.O.) 13694 (“Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities”), as amended?

A “person” subject to designation under E.O. 13722 or E.O. 13694, as amended, includes an individual or an entity, defined as “a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization.”  Once OFAC has determined that a person is subject to sanctions, OFAC adds that person to the Specially Designated Nationals and Blocked Persons List.

OFAC designated the entity known as Tornado Cash, which is a “partnership, association, joint venture, corporation, group, subgroup, or other organization” that may be designated pursuant to IEEPA.  Tornado Cash’s organizational structure consists of: (1) its founders and other associated developers, who together launched the Tornado Cash mixing service, developed new Tornado Cash mixing service features, created the Tornado Cash Decentralized Autonomous Organization (DAO), and actively promoted the platform’s popularity in an attempt to increase its user base; and (2) the Tornado Cash DAO, which is responsible for voting on and implementing new features created by the developers.  Tornado Cash uses computer code known as “smart contracts” to implement its governance structure, provide mixing services, offer financial incentives for users, increase its user base, and facilitate the financial gain of its users and developers.  OFAC has not designated Tornado Cash’s individual founders, developers, members of the DAO, or users, or other persons involved in supporting Tornado Cash at this time.  However, all Tornado Cash property and interests in property are blocked, and U.S. persons cannot transact with Tornado Cash or deal in its property and interests in property, absent authorization from OFAC.  See FAQs 1077 and 1078.

Released on 11/08/2022

Frequently Asked Question 1095

1095. Who is the Tornado Cash “person” that OFAC designated pursuant to E.O. 13722 (“Blocking Property of the Government of North Korea and the Workers’ Party of Korea, and Prohibiting Certain Transactions with Respect to North Korea”) and Executive Order (E.O.) 13694 (“Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities”), as amended?

A “person” subject to designation under E.O. 13722 or E.O. 13694, as amended, includes an individual or an entity, defined as “a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization.”  Once OFAC has determined that a person is subject to sanctions, OFAC adds that person to the Specially Designated Nationals and Blocked Persons List.

OFAC designated the entity known as Tornado Cash, which is a “partnership, association, joint venture, corporation, group, subgroup, or other organization” that may be designated pursuant to IEEPA.  Tornado Cash’s organizational structure consists of: (1) its founders and other associated developers, who together launched the Tornado Cash mixing service, developed new Tornado Cash mixing service features, created the Tornado Cash Decentralized Autonomous Organization (DAO), and actively promoted the platform’s popularity in an attempt to increase its user base; and (2) the Tornado Cash DAO, which is responsible for voting on and implementing new features created by the developers.  Tornado Cash uses computer code known as “smart contracts” to implement its governance structure, provide mixing services, offer financial incentives for users, increase its user base, and facilitate the financial gain of its users and developers.  OFAC has not designated Tornado Cash’s individual founders, developers, members of the DAO, or users, or other persons involved in supporting Tornado Cash at this time.  However, all Tornado Cash property and interests in property are blocked, and U.S. persons cannot transact with Tornado Cash or deal in its property and interests in property, absent authorization from OFAC.  See FAQs 1077 and 1078.

Released on 11/08/2022

Amended Frequently Asked Questions

Designation of the Burmese Regime’s Military Aircraft Suppliers

PRESS STATEMENT

ANTONY J. BLINKEN, SECRETARY OF STATE

NOVEMBER 8, 2022

Burma’s military regime has waged a brutal campaign of violence against the people of Burma, carrying out lethal air strikes against the political opposition and the broader civilian population.  On October 23, the regime carried out one of its deadliest aerial bombings since the coup, firing upon an ethnic community gathering in an attack that killed as many as 100 people and claimed the lives of artists, performers, and concertgoers in Kachin state.  We stand with the people of Burma in the face of the regime’s increasingly brazen attempts to terrorize and intimidate them, while suppressing their aspirations for a democratic, inclusive, and prosperous future.

Today, the United States is taking additional actions against those who enable the regime’s violence, particularly its repeated air assaults and killing of civilians.  The Department of the Treasury is designating Sky Aviator Company Limited and its owner and director, Kyaw Min Oo, pursuant to Executive Order 14014, for operating in the defense sector of the Burmese economy.  Under Kyaw’s control, Sky Aviator is a key supplier of military aircraft parts to Burma’s military.  Since the February 2021 coup, Sky Aviator has received multiple arms shipments from sanctioned entities.  Kyaw has also facilitated foreign military officers’ visits to Burma as well as the import of arms and other military equipment and provided assault helicopter upgrades.

The United States will continue to work with our partners to promote justice and accountability for the regime’s human rights abuses and deprive the regime of the revenue and resources it uses to commit atrocities against the people of Burma.

U.S. State Department Press Release

PRESS RELEASES

Treasury Targets Major Arms Broker for Burma’s Military Regime

November 8, 2022

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated pursuant to Executive Order (E.O.) 14014 one individual and one entity that facilitate weapons purchases for Burma’s military regime. This action, which is in conjunction with newly issued European Union sanctions, marks the second anniversary of the last general election in Burma on November 8, 2020, which was brutally overturned by a military coup on February 1, 2021.

Burma’s military regime has continued to oppress and deny the will of the people to chart an inclusive, democratic future for their country. The sanctions announced today do not target the people of Burma but rather target those who profit from the oppressive actions of the regime by operating in the defense sectors of Burma’s economy and by enabling Burma’s military connections to foreign militaries.

“Kyaw Min Oo profits from the violence and suffering the military has inflicted on the people of Burma since the military coup,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “Treasury reaffirms the United States’ commitment to continue increasing pressure on the regime and its supporters until they change course and allow for a return to democracy.”

ARMS DEALER

Kyaw Min Oo is a Burmese national and businessman with close ties to the Burmese military. Since before the February 2021 coup, Kyaw Min Oo has facilitated arms deals and weapons purchases on behalf of Burma’s military, while also acting as the middleman to arrange visits to Burma by high-ranking foreign military officers. Additionally, Kyaw Min Oo has used his company, Sky Aviator Company Limited, to facilitate upgrades and maintenance for Burmese military aircraft.

Kyaw Min Oo is being designated pursuant to E.O. 14014 for operating in the defense sector of the Burmese economy.

Sky Aviator Company Limited is a company founded by Kyaw Min Oo and has facilitated arms deals on behalf of the Burmese military, to include the import of aircraft parts.  Sky Aviator Company Limited was designated by the United Kingdom on June 16, 2022.

Sky Aviator Company Limited is being designated pursuant to E.O. 14014 for operating in the defense sector of the Burmese economy.

SANCTIONS IMPLICATIONS

As a result of today’s action, pursuant to E.O. 14014, all property and interests in property of the persons named above that are in the United States, or in the possession or control of U.S. persons, are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.

Unless authorized by a general or specific license issued by OFAC, or otherwise exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution or provision of funds, goods, or services from any such person.
The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the Specially Designated Nationals and Blocked Persons List (SDN List), but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please refer to OFAC’s website.

U.S. Treasury Department Press Release

Disrupting DPRK Logistical and Financial Networks Supporting Unlawful Weapons Programs

PRESS STATEMENT

NED PRICE, DEPARTMENT SPOKESPERSON

NOVEMBER 8, 2022

The United States continues to take steps to limit the Democratic People’s Republic of Korea (DPRK)’s access to logistical and financial resources for its unlawful ballistic missile and weapons of mass destruction programs, which are in clear violation of multiple UN Security Council resolutions and threaten regional peace and security. The U.S. Department of the Treasury is designating two individuals for engaging in transportation and procurement activities on behalf of the DPRK. Ri Sok and Yan Zhiyong are representatives of the DPRK’s national airline Air Koryo, and they help the airline transport goods back to DPRK on behalf of two UN- and U.S.-designated entities involved in intelligence activities, arms trade, and the DPRK’s ballistic missile and nuclear programs. Treasury is designating Ri Sok and Yan Zhiyong pursuant to Executive Order (E.O.) 13722 for acting or purporting to act for or on behalf of, directly or indirectly, Air Koryo, which was previously designated pursuant to E.O. 13722 and has direct ties to DPRK military activities and missile program.

Treasury is also re-designating Tornado Cash, a virtual currency mixer, pursuant to E.O. 13722 for providing material support to the Lazarus Group, whose malicious cyber activities have supported the DPRK’s weapons of mass destruction program, and E.O. 13694. The use of Tornado Cash to launder stolen funds represents a larger trend by the DPRK regime to resort to illicit activities, including cyber-enabled heists from virtual currency exchanges and financial institutions, to generate revenue for its unlawful WMD and ballistic missile programs. The United States is committed to countering the regime’s attempts to raise funds through illicit activity and will continue to take actions against entities facilitating such activity.

We once again call on all countries to fully implement DPRK-related UN Security Council resolutions in order to prevent the DPRK from acquiring the technologies and materials it needs to sustain its unlawful weapons programs.

U.S. State Department Press Release

PRESS RELEASES

Treasury Designates DPRK Weapons Representatives

November 8, 2022

Tornado Cash Redesignated with Additional DPRK Authorities, New OFAC Guidance

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is designating two individuals for engaging in transportation and procurement activities on behalf of the Democratic People’s Republic of Korea (DPRK). These individuals have acted on behalf of Air Koryo, an entity previously designated by OFAC for operating in the transportation industry in the DPRK economy. OFAC also delisted and simultaneously redesignated Tornado Cash under Executive Order (E.O.) 13722 and E.O. 13694, as amended. The redesignation takes into account additional information and also includes an additional basis for the designation of Tornado Cash regarding its support for DPRK activities. Tornado Cash, an entity that provides virtual currency mixing services, obfuscated the movement of over $455 million stolen in March 2022 by the OFAC-designated, DPRK-controlled Lazarus Group in the largest known virtual currency heist to date. OFAC also issued a new Frequently Asked Question (FAQ) to provide additional compliance guidance regarding the nature of the Tornado Cash entity, and updated three existing FAQs with additional guidance.

This action is part of the United States’ ongoing efforts to limit the DPRK’s ability to advance its unlawful weapons of mass destruction (WMD) and ballistic missile programs that threaten regional stability and follows numerous recent DPRK ballistic missile launches, which are in clear violation of multiple United Nations (UN) Security Council resolutions. Continued provocation by the DPRK exemplifies the threat its unlawful weapons and missile programs pose to its neighbors, the region, international peace and security, and the global non-proliferation regime.

“Today’s sanctions action targets two key nodes of the DPRK’s weapons programs: its increasing reliance on illicit activities, including cybercrime, to generate revenue, and its ability to procure and transport goods in support of weapons of mass destruction and ballistic missile programs,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson.

INDIVIDUALS FACILITATING THE DPRK’S BALLISTIC MISSILE AND WEAPONS PROGRAMS

Air Koryo is the DPRK’s national flag carrier and reportedly continues to own and operate all civilian aircraft registered in the DPRK. Air Koryo previously transported parts used in Scud-B missile systems, which fall under a UN prohibition on exporting arms and related materiel to the DPRK. According to a UN report, Air Koryo is controlled by and integrated into the DPRK military and the airline’s assets are actively utilized for military purposes.

Ri Sok, an Air Koryo representative in Dandong, China, was involved in the transportation of electronic parts from China to the DPRK on behalf of the DPRK’s Ministry of Rocket Industry (MORI). OFAC designated MORI on April 1, 2022 for being owned or controlled by the Munitions Industry Department (MID), an entity designated on August 30, 2010 pursuant to E.O. 13382 for its involvement with or provision of support for the DPRK’s WMD and ballistic missile programs. The MID, which oversees the DPRK’s ballistic missile development and nuclear weapons program, was designated by the UN on March 2, 2016.

Yan Zhiyong is a logistics manager with Air Koryo and facilitates the transportation of goods to the DPRK. Specifically, Yan Zhiyong transported goods from China to the DPRK on behalf of the Reconnaissance General Bureau (RGB), the DPRK’s principal intelligence agency. The RGB, which is also involved in the DPRK’s arms trade, was designated on January 2, 2015 pursuant to E.O. 13687 for being a controlled entity of the Government of the DPRK. The RGB was designated by the UN on March 2, 2016. Yan Zhiyong was the primary point of contact and intermediary for shipments destined for the DPRK and has used a Beijing-based company to transport goods into the DPRK.

Ri Sok and Yan Zhiyong are designated pursuant to E.O. 13722 for acting or purporting to act for or on behalf of, directly or indirectly, Air Koryo, a person whose property and interests in property are blocked pursuant to E.O. 13722 and who has ties to the DPRK’s military activities.

REDESIGNATING TORNADO CASH

In addition to the Air Koryo representatives, OFAC simultaneously delisted and redesignated Tornado Cash under E.O. 13722 and E.O. 13694, as amended, for its role in enabling malicious cyber activities, which ultimately support the DPRK’s WMD program. Effective immediately, the August 8, 2022 designation of Tornado Cash is no longer operative, and it is wholly replaced by today’s action.

Tornado Cash is an entity that provides virtual currency mixing services through smart contracts that primarily operate on the Ethereum blockchain. The Tornado Cash smart contracts are a form of computer code that Tornado Cash uses to implement its governance structure, provide mixing services, offer financial incentives for users, increase its user base, and facilitate the financial gain of its users and developers. These smart contracts have been used by actors to obfuscate the source of funds derived from cyber heists, including funds stolen by Lazarus Group in March 2022.  Malicious cyber actors subsequently used the Tornado Cash smart contracts to launder more than $96 million of funds derived from the June 24, 2022 Harmony Bridge Heist, and at least $7.8 million from the August 2, 2022 Nomad Heist.

Lazarus Group used the Tornado Cash smart contracts to obfuscate the source of funds derived from the March 2022 cyber heist. Lazarus Group was designated on September 13, 2019 pursuant to E.O. 13722 for being an agency, instrumentality, or controlled entity of the RGB, which has been identified as part of the Government of the DPRK. Today, OFAC is sanctioning Tornado Cash pursuant to E.O. 13722 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the Government of the DPRK, a person whose property and interests in property are blocked pursuant to E.O. 13722.

OFAC is also redesignating Tornado Cash pursuant to E.O. 13694, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, a cyber-enabled activity originating from, or directed by persons located, in whole or in substantial part, outside the United States that is reasonably likely to result in, or has materially contributed to, a significant threat to the national security, foreign policy, or economic health or financial stability of the United States and that has the purpose or effect of causing a significant misappropriation of funds or economic resources, trade secrets, personal identifiers, or financial information for commercial or competitive advantage or private financial gain. Specifically, the smart contracts through which Tornado Cash operates were used to obfuscate the source and destination of funds derived from Lazarus Group’s March 2022 cyber heist.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the individuals and entity designated today that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons.

In addition, persons that engage in certain transactions with the individuals or entities designated today may themselves be exposed to designation. Furthermore, any foreign financial institution that knowingly facilitates a significant transaction or provides significant financial services for any of the individuals or entities designated today could be subject to U.S. correspondent or payable-through account sanctions.

The power and integrity of OFAC sanctions derive not only from its ability to designate and add persons to the Specially Designated Nationals and Blocked Persons (SDN) List but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please refer to OFAC’s website.

For additional information and guidance regarding sanctions implications specific to Tornado Cash, please reference OFAC’s FAQs 1076–1079 and FAQ 1095.

For information on complying with virtual currency-related sanctions, please see OFAC’s Sanctions Compliance Guidance for the Virtual Currency Industry hereand OFAC’s FAQs on virtual currency here.

U.S. Treasury Department Press Release