Tornado Cash (TORN) is an open-source protocol that makes transactions private on the Ethereum (ETH) blockchain. However, the platform is quite familiar to cyber criminals as it is often mentioned in crypto heists.
“Tornado Cash has been the go-to mixer for cybercriminals looking to launder the proceeds of crime, as well as helping to enable hackers, including those currently under U.S. sanctions, to launder the proceeds of their cybercrimes by covering up the origin and transfer of this illicit virtual currency,” a senior department official said. “Since its creation back in 2019, Tornado Cash has reportedly laundered more than $7 billion worth of virtual currency.”
Only in 2022, Tornado Cash has been mentioned in many hacks, including the $615 million theft of tokens from Ronin, a network supporting the nonfungible token game Axie Infinity, and a $100 million attack on U.S. startup Harmony. Both were linked by security researchers with Lazarus Group, a North Korean state-backed hacking group.
Blockchain analytics firm Elliptic found at least $1.5 billion in proceeds from crimes such as ransomware, hacks, and fraud have been laundered through Tornado Cash, and that the entirety of the $100 million stolen from the Harmony bridge in June was laundered through the service.
Although Tornado Cash has shown its cooperation to solve the problem, the increasingly sophisticated crypto crime has made the community wary of the platform.
In a notice posted on August 8, US Treasury Department listed nearly 40 ETH and USDC wallets connected to Tornado Cash on the Specially Designated Nationals (SDN). This list is often used to block severe websites or cybercriminals. The addresses on SDN are not only prohibited from interacting with Tornado Cash but are also prohibited from connecting to all other Ethereum wallet addresses.
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