Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at how Tornado Cash has seen a massive rise in deposits during the first half of 2024.
Tornado Cash Deposits
The popular crypto mixer 'Tornado Cash' has seen a spike in deposits throughout the first half of 2024, with over $1.8 billion deposited during the first half of the year. This figure shows a surge in use, with 45% more in deposits compared to the total of 2023. This comes according to blockchain analytics firm Flipside Crypto. The increase in activity comes following a dwindle in activity after the US government had imposed sanctions on the platofrm two years ago.
Back in August 2022 the Foreign Assets Control (OFAC) officially sanctioned the platform after it was revealed that North Korean hacking consortium Lazarus Group had managed to launder around $455 million in illicit funds through the protocol. Following the sanctions the monthly deposits on Tornado Cash had dropped by over 90%. The sanctions meant that anybody who interacted with the protocol would be placed on a 'blacklist.'
The protocol was created with the intention of preserving privacy, however, the service has seen heavy inflows from hackers involved in big thefts. It allows users to deposit funds into a mixed pool of different transaction before distributing them, thus making it harder to trace them to their original source.
According to Arkham Intelligence. the hacker(s) behind the Poloniex exchange heist, who made off with over $100 million last year, managed to transfer $76 million to Tornado in the past two months. Hackers involved in the HECO Bridge and Orbit Chain exploits have also managed to move $166 million and $47.7 million respectively into the crypto mixer during 2024.
A recent report by analytics firm Chainalysis noted:
“Consistent with a general uptick in market activity, mixers have begun to see a resurgence in 2024. When looking at the growth of individual mixing services overall, we see that WasabiWallet, JoinMarket, and Tornado Cash have grown the most.”
Tornado Cash’s revival shows how even the wide-ranging crackdown on crypto by US authorities hasn’t been anywhere near enough to eradicate the industry from its reputation of being illegitimate and for criminals. The US Blockchain Integrity Act, introduced by democratic representatives, will look to crack down on this illicit activity and on cryptocurrency mixers in general.
The proposed legislation will look to disrupt the flow of illicit funds and promote transparency by prohibiting financial institutions, cryptocurrency exchanges, and registered money service businesses receiving any funds which has passed through a cryptocurrency mixer. Failure to adhere to these rules would result in civil penalties of up to $100,000.
The three co-founders of Tornado Cash, Alexey Pertsev, Roman Storm, and Roman Semenov, have all faced legal challenges following the regulatory crackdown on their mixing protocol. Alexey Pertev was sentenced to five years and four months in Dutch prison on money laundering charges in 2023. Roman Storm was arrested in the United States back in August 2023 and pleaded not guilty to money laundering charges. He was released on a $2 million bond and has filed a motion to dismiss all charges. Roman Semenov meanwhile remains at large.
Have a great day.
Peace. CryptoGod-1.
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