According to blockchain intelligence firm Arkham, Tornado Cash’s Ethereum mainnet contracts have seen a total of $77.35 million in assets flow through them within the past 30 days. Despite being sanctioned by the US Treasury Department in August 2022, Tornado Cash remains the largest crypto mixer on the Ethereum network.
Tornado Cash and Sanctions Allegations
The US authorities accused Tornado Cash of being used by the North Korean hacker group, Lazarus Group, to launder millions of dollars in cryptocurrencies. Developers Roman Storm and Roman Semenov are currently facing allegations of money laundering and sanctions violations.
Arkham’s report reveals that Tornado Cash’s assets have experienced a significant drop of over 60%, and transfer volume has also declined after being sanctioned by US regulators last year. However, both the total value locked (TVL) and transfer volume have shown signs of recovery. Currently, Tornado Cash’s TVL stands at $118.3K ETH, which is worth $187.9 million.
Tornado Cash’s Role in Laundering and Its Impact
Tornado Cash operates on multiple chains, obfuscating transfers of various cryptocurrencies. The platform’s most mixed asset is native ETH on the Ethereum mainnet. In July 2021, Tornado Cash held over $700 million of ETH in its pool contracts.
Tornado Cash has been exploited by the Lazarus Group, associated with the Democratic People’s Republic of Korea (DPRK), to launder currency stolen from Sky Mavis’s Ronin Bridge. By using Tornado Cash, hackers can legitimize the source of their funds by eliminating connections to hacked wallets or illicit crypto activities, thus making it a prime target for authorities worldwide.
Major crypto hacks involving multi-million dollar sums have frequently been found to utilize Tornado Cash for laundering stolen funds, as reported by Arkham. In an effort to overturn the ban on this crypto mixer, which has been deemed a violation of free speech since Tornado Cash is an open-source software, a lawsuit backed by Coinbase was filed against the US Treasury Department. Nevertheless, the court ultimately ruled in favor of the United States Department of the Treasury.
