Tornado Cash Laundered Over Half a Billion Worth of Crypto in 2023
Despite being hit with U.S. sanctions in late 2022, Tornado Cash, a notorious crypto mixing service, continues to facilitate the laundering of hundreds of millions of dollars in cryptocurrencies by criminals. SlowMist’s data shows that in 2023 alone, Tornado Cash processed around 314,740 ETH withdrawals, equivalent to approximately $567.2 million based on 2023 rates.
Analyzing the situation, experts have observed that Lazarus Group, a North Korea-affiliated hacker group, has reduced its visibility while focusing on laundering the large amount of funds they stole in 2022. However, TRM Labs reports that Tornado Cash’s overall transaction volume has decreased by nearly 85% since the sanctions were imposed. TRM Labs also noted that North Korean hackers have shifted their preference towards more traditional Bitcoin mixers.
“Perhaps most importantly, North Korean hackers appear to have largely abandoned the service in favor of more traditional Bitcoin mixers.”
TRM Labs
Mixing Protocols Fill the Void Left by Tornado Cash’s Decline
Although Tornado Cash’s volume has declined following the sanctions, the crypto landscape continues to witness the emergence of new mixing services seeking to take its place in the market. In November 2023, crypto.news reported that the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on Sinbad (formerly Blender.io), another crypto mixing service involved in money laundering for bad actors, including Lazarus Group.
In 2022, OFAC sanctioned Tornado Cash for its role in laundering over $7 billion worth of crypto since 2019. These funds included $455 million stolen by Lazarus Group, over $96 million from malicious cyber actors’ funds related to the Harmony Bridge heist, and at least $7.8 million from the Nomad heist.
Hot Take: Criminals Continue to Exploit Crypto Mixing Services Despite Sanctions
Crypto mixing services like Tornado Cash and Sinbad have been instrumental in aiding criminals with money laundering activities. Although regulatory measures have been taken against these services, criminals are finding alternative means to continue their illicit operations. The decline in Tornado Cash’s dominance has created an opportunity for new mixing protocols to emerge and fill the void left behind. The fight against crypto-enabled criminal activities remains ongoing as regulators and law enforcement agencies adapt to address the evolving tactics of bad actors.
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