Hackers Continue to Exploit Tornado Cash Despite Sanctions
In August 2022, the US Treasury Department’s Office of Foreign Asset Control (OFAC) imposed sanctions on Tornado Cash, prohibiting its usage for US citizens, residents, and companies. However, hackers are still finding ways to use the controversial crypto tumbler to move stolen funds and avoid detection.
According to PeckShield, a blockchain security firm, exploiters of the HECOBridge have moved over 40,391 ETH (valued at around $145.7 million) in the past 8 days through Tornado Cash. These transactions involve outgoing transfers from the HECO cross-chain bridge.
Exploits on the HECO Cross-Chain Bridge
The HECO cross-chain bridge was exploited in November 2023, resulting in compromised funds being transferred to decentralized exchanges and converted into altcoins. PeckShield’s investigation also uncovered another exploit involving HTX, with suspicious transfers totaling $23.4 million observed shortly after the Heco Bridge attack.
PeckShield flagged movements of illicit funds through Tornado Cash four months later. The security firm’s update on March 22nd stated that exploiters had transferred approximately $40,391.8 ETH (equivalent to $145.7 million) to Tornado Cash within the last 8 days.
Continued Illicit Activities Despite Sanctions
Despite facing sanctions and a decline in monthly inflows post-sanctions, Tornado Cash continues to be used for illicit activities. CertiK recently flagged a 3,700 ETH deposit into Tornado Cash worth $10 million. These funds were associated with a phishing attack from September 2023 and were stolen from an unknown crypto whale.
Chainalysis also reported a 93% drop in monthly inflows to Tornado Cash after the sanctions were imposed. However, these developments suggest that while the sanctions posed a challenge, they did not completely halt all illicit activities due to the decentralized nature of Tornado Cash.
Legal Troubles for Tornado Cash Developers
The legal troubles for Tornado Cash developers continue to grow. Alexey Pertsev, a developer of Tornado Cash, was indicted in the Netherlands for allegedly laundering $1.2 billion of illicit funds through the platform. Pertsev, a Russian national, has been in jail since August 2022.
In addition to Pertsev, two other developers of Tornado Cash, Roman Storm and Roman Semenov, are facing similar allegations of money laundering and sanctions violations in the United States.
Hot Take: Hackers Find Ways to Circumvent Sanctions on Tornado Cash 🚀
Despite the US Treasury Department’s sanctions on Tornado Cash, hackers are still exploiting the crypto tumbler to move stolen funds undetected. PeckShield’s latest update reveals significant activity involving the HECOBridge and Tornado Cash.
These ongoing exploits highlight the challenges faced by authorities in curbing illicit activities in the crypto space. The decentralized nature of platforms like Tornado Cash makes it difficult to completely eliminate such activities.
As regulators continue to address these challenges, it is crucial for individuals and companies to exercise caution when engaging with crypto platforms and be aware of potential risks associated with illicit activities.
Sources:
– CryptoNews
– CoinDesk
– Ledger Insights
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