Tornado Cash Laundered Over $500 Million Despite US Sanctions
A blockchain security firm, SlowMist, has disclosed that the sanctioned crypto mixer, Tornado Cash, managed to launder more than $500 million worth of cryptocurrency in 2023, despite being under US sanctions. This news comes from data provided by SlowMist, which revealed the laundering activity carried out by the crypto mixer.
Tornado Cash Defies Sanctions
Despite facing sanctions imposed by the US in 2022, Tornado Cash didn’t slow down its operations. SlowMist’s data shows that this mixing service successfully laundered over $550 million in cryptocurrency in 2023.
Unpacking Tornado Cash’s Activities during 2023
In a thread on X (formerly Twitter), SlowMist shed light on the activities of Tornado Cash and the actors involved in 2023. The firm shared that 342,042 ETH was deposited into Tornado Cash, while 314,740 ETH was withdrawn from the platform.
Surge in the Use of Advanced Tools
SlowMist also highlighted a significant increase in the use of advanced tools such as Sinbad, Tornado Cash, and Railgun during 2023. These tools have complicated the tracing of illicit transactions and pose a challenge to combating crypto-related crimes.
The Involvement of Tornado Cash in Money Laundering
Tornado Cash came under US government sanctions after being added to the Treasury’s Office of Foreign Assets Control (OFAC) SDN list in August 2022. The mixing service has been linked to the Lazarus Group, a North Korean hacking group, and allegedly laundered over $7 billion in virtual currency since its establishment in 2019.
Legal Troubles for Tornado Cash Co-founders
Following the US sanctions, one of Tornado Cash’s developers was arrested in the Netherlands. Furthermore, in August 2023, the US government charged two co-founders of Tornado Cash, Roman Storm and Roman Semenov, with conspiracy to commit money laundering, sanctions violations, and operating an unlicensed money-transmitting business.
Concerns Remain Despite Decline in Security Breaches
While security breaches decreased by 51% in 2023 compared to the previous year, the compromise of crypto assets remains a significant cause for concern. Despite outrage from users, appeals to lift the sanctions on Tornado Cash were unsuccessful.
Hot Take: Tornado Cash Continues to Evade Sanctions and Launder Crypto
Despite being sanctioned by the US government, Tornado Cash managed to avoid any significant hindrances and laundered over $500 million worth of cryptocurrency in 2023. This continued activity highlights the challenges faced in combatting money laundering in the crypto space. The involvement of Tornado Cash with the Lazarus Group and the subsequent legal troubles faced by its co-founders demonstrate the implications of illicit crypto transactions. While security breaches decreased, it is clear that further efforts are needed to address the compromise of crypto assets and ensure a more secure environment for users.
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