Tornado Cash was a decentralized protocol that allowed transactions to be anonymized on Ethereum and several other blockchains. According to analyst companies, this protocol was a popular way to launder money related to cybercrime. Because of this, Tornado Cash came under U.S. sanctions in August 2022, and the service’s co-founder Alexey Pertsev was arrested in the Netherlands. Tornado Cash repositories in GitHub were removed, and crypto-assets of users totaling more than $430 million were blocked.
In September 2022, after community protests, U.S. officials allowed users to withdraw cryptocurrency from blocked addresses if they could prove the legality of their origin. A group of Tornado Cash clients filed a lawsuit against the U.S. rulers in a Texas court, accusing them of exceeding their authority. Human rights activists and representatives of the crypto industry also point this out.
And all of the above are just the main events related to Tornado Cash, and it’s a fascinating story. If you are not a fan of such adventures, we advise you to try a high-quality, legitimate mixer https://yomix.io. It will please you with low commissions and a fast mixing process. If you’re wondering what exactly happened with Tornado Cash, read on.
Why was Tornado Cash sanctioned, and what were the mistakes of this mixer?
It’s common for creators of cryptocurrency mixers to claim that they play an essential role in protecting the privacy of users and investors. But in some cases, this is a deception, as such services are often used to launder the proceeds of organized crime.
Throughout the history of Tornado Cash, one can find quite a few examples of the service being used to clear stolen crypto-assets. Here are just a few instances from the past year:
- In January, 4,600 ETH worth $15 million were stolen from Crypto.com and mixed with Tornado Cash.
- In March, hackers stole $625 million in assets from the popular P2E game Axie Infinity. It was one of the largest hacks in the crypto industry’s history. Some of this amount was anonymized through Tornado Cash.
- In June, Horizon was hacked – then attackers stole about $100 million in assets, most of which went to Tornado Cash.
- In July, more than 1,300 ETH worth of assets were stolen from Omni’s lending protocol and sent to the mixer.
Even the largest and most reputable companies report Tornado Cash’s involvement in the crime. For example, Chainalysis estimates that over $3.5 billion has passed through Tornado Cash over its lifetime, $1.2 billion of which is directly related to theft, hacking, and other illegal transactions.
Chainalysis isn’t the only one who has spoken out for justice. For example, Elliptic experts claim that Tornado Cash was actively used to launder money from NFT fraud. As for the sanctions themselves – they were devastating. As a result, all Tornado Cash property, user funds, and source code were blocked in the U.S. and abroad, and residents were prohibited from using the service.
This caused a lot of user outrage, so under public pressure, the U.S. Treasury Department allowed withdrawals from blocked addresses. This is the story of Tornado Cash. If you’re considering using mixers to increase your anonymity, look for excellent-quality samples like Yo!Mix.