Key points:
- 2024 has witnessed a remarkable comeback for Tornado Cash, attracting $1.9 billion in deposits within the first half of the year.
- The rise in deposits occurs amidst persistent US sanctions and the ongoing legal turmoil faced by its creators.
- Cyber criminals persist in utilizing Tornado Cash as an avenue to obscure illicit crypto funds.
- WazirX, an Indian crypto platform, experienced a security breach worth $235 million, directly tied to Tornado Cash.
- The US Treasury casts a wary eye on crypto mixers labeling them as threats to national security, although some factions within the industry contest these sanctions.
In 2024, a surge in activity for Tornado Cash, a service designed to mix cryptocurrencies, has been noted, notwithstanding persistent sanctions and legal confrontations.
Flipside Crypto data indicates that the platform amassed nearly $1.9 billion in deposits during the opening half of the year, marking a notable 50% rise compared to the entire 2023. 'USD Deposits/Withdrawals for Tornado Cash' — Monthly Figures
Due to these restrictions, any crypto wallet associated with Tornado Cash runs the risk of being blacklisted, complicating fund withdrawals via lawful crypto exchanges.
Despite the constraints, Tornado Cash continues as a favored tool among cyber thieves eager to obscure the origins of stolen digital currencies.
Recent insights from blockchain analytics firm, Arkham Intelligence,
R Reveal that a hacker, responsible for compromising $100 million at Poloniex, shifted $76 million through Tornado Cash since May. In similar vein, perpetrators behind the HECO Bridge and Orbit Chain hacks funneled $166 million and $48 million respectively during the first half of 2024. Tornado Cash's continued use by cyber attackers has been spotlighted once more in an event concerning WazirX, an Indian crypto exchange.
culminating in a $235 million shortfall. One wallet involved in this breach was traced back to a Tornado Cash transaction, further cementing the mixer's role in crypto-related offences.
On July 18, 2024, WazirX reported a security breach A legal bid against Tornado Cash sanctions was lodged by the crypto sector in 2022.
Proponents argue that these sanctions are “illegal and unconstitutional” since Tornado Cash functions neither as a nation nor a “corporate entity,” and hindering it infringes upon freedom of speech rights enshrined within the US Constitution.
Numerous prominent crypto organizations, spanning from Coinbase to advocacy groups like The Blockchain Association and Coin Center, have thrown their support behind this legal action.
Conversely, the US Treasury persistently argues that crypto mixers are integral to national security threats, asserting that Tornado Cash neglected to enforce sufficient anti-money laundering controls.
This viewpoint has ushered in legal woes for the platform’s co-founders.
Alexey Pertsev, sentenced to over five years in a Dutch prison for money laundering offenses, While Roman Storm was taken into custody in the US, denying similar allegations, and Roman Semenov remains evading capture. The renewed activity surrounding Tornado Cash underscores the ongoing regulatory challenges posed by DeFi platforms. Though US officials have intensified their crackdown on crypto malpractices, the decentralized nature inherent to protocols like Tornado Cash complicates enforcement.
Editor-in-chief of Blockonomi and the brains behind Kooc Media, a media enterprise operating from the UK. Advocate for Open-Source Software, Blockchain Technology, and the ethos of a Free and Fair Internet accessible to all.
