Tornado Cash Surpasses $1.8 Billion in Deposits in H1, a 45% Increase Compared to Entire 2023
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Popular crypto mixing protocol Tornado Cash has experienced a resurgence in 2024, with deposits surpassing $1.8 billion in the first half of the year.
The figure is up by 45% compared to the total amount deposited in the crypto mixer during the entirety of 2023, according to blockchain analytics firm Flipside Crypto.
The renewed surge in Tornado Cash activity comes as the platform’s activity had dwindled following sanctions imposed by the US government two years ago.
Tornado Cash Attracts Bad Actors
In recent times, Tornado Cash has observed a substantial influx of funds from hackers involved in major thefts.
Notably, the perpetrator behind the Poloniex exchange heist, who made off with over $100 million last year, transferred $76 million to Tornado Cash in the past two months, as reported by Arkham Intelligence.
Additionally, hackers responsible for exploiting the HECO Bridge and Orbit Chain have moved $166 million and $47.7 million, respectively, to the mixer this year.
In August 2022, Tornado Cash faced sanctions from the US Treasury due to its involvement in laundering more than $455 million worth of cryptocurrency stolen by the North Korea-affiliated hacking group, Lazarus.
Following the sanctions, monthly deposits to Tornado Cash plummeted by over 90%.
However, the decentralized nature of the protocol poses challenges for US authorities in effectively monitoring its usage.
“Consistent with a general uptick in market activity, mixers have begun to see a resurgence in 2024,” blockchain analytics firm Chainalysis said in a recent report.
“When looking at the growth of individual mixing services overall, we see that WasabiWallet, JoinMarket, and Tornado Cash have grown the most.”
Mixing services like Tornado Cash were originally developed to uphold privacy, a fundamental principle in the decentralized realm of cryptocurrencies.
These services pool funds from various transactions, making it challenging to trace them back to their original source.
Consequently, such platforms became attractive to malicious actors seeking to launder illicitly obtained assets.
US House Proposes Ban on Cryptocurrency Mixers
Democratic representatives have introduced the US Blockchain Integrity Act, which aims to crack down on cryptocurrency mixers.
The proposed legislation aims to disrupt the flow of illicit funds and promote transparency by prohibiting financial institutions, cryptocurrency exchanges, and registered money service businesses from accepting funds processed through a mixer.
Failure to do so would result in civil penalties of up to $100,000.
The development comes amidst the U.S. government’s ongoing crackdown on crypto-mixing services.
Recently, the founder of Bitcoin Fog, a $400 million crypto-mixing service, was convicted of money laundering.
Roman Sterlingov was found guilty of money laundering, money laundering conspiracy, operating an unlicensed money-transmitting business, and violations of the D.C. Money Transmitters Act.
Likewise, Roman Storm and Roman Semenov, co-founders of Tornado Cash, have been indicted.
The indictment charges them with conspiracy to commit money laundering, conspiracy to violate US sanctions, and conspiracy to operate an unlicensed money-transmitting business.
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