Originally Published: 08 AUG 22 12:09 ET

By Jennifer Hansler and Brian Fung, CNN

(CNN) -- The US Treasury on Monday sanctioned Tornado Cash, a virtual currency mixer, for its use by cybercriminals, including those under US sanctions.

According to a senior Treasury official, Tornado Cash has reportedly laundered more than $7 billion in virtual currency since its launch in 2019, including $455 million from the Lazarus Group, a North Korean state-sponsored hacking group. It was also used as recently as last week to launder money from a "heist" of Nomad, a US cryptocurrency firm, the official said.

Monday's sanctions will prohibit US persons, and those subject to US jurisdiction, from using the virtual currency mixer.

A virtual currency mixer receives a number of transactions and mixes them together before sending them to their ultimate destination to make it harder to trace where the money came from or where it's going.

Tornado Cash did make some efforts to comply with its regulatory obligations, including by adding a screening tool to prevent money from going to previously sanctioned cryptocurrency wallets, the senior Treasury official said. But despite that, law enforcement analysis of public cryptocurrency transactions showed hackers such as the Lazarus Group were still able to send money to Tornado Cash for laundering, the official said.

As part of Monday's action, 44 cryptocurrency wallets linked to Tornado Cash were sanctioned by the US government. The Treasury official said Tornado Cash had been previously identified as an entity of concern, but declined to say for how long and where the organization may be based or what individuals may be operating it.

"Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks," Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson said in a statement. "Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them."

According to the Treasury official, Tornado Cash is one of the largest virtual currency mixers that has been identified by the US government. It is only the second time the Department has sanctioned such an entity.

In May, the Treasury Department sanctioned another virtual currency mixer, Blender.io, which it said was used by North Korea "to support its malicious cyber activities and money laundering of stolen virtual currency."

The official said they hoped Monday's sanctions would send a message to the private sector and partner nations to encourage them to develop regulations when it comes to virtual currency.