On June 23, 2025, analytics researcher Zachxbt flagged 193 small withdrawals from Coinbase, totaling approximately $1.67 million USDC.
Initial Operation and Its Results
According to available data, instead of one large transfer, the funds were split into multiple minor transactions. This approach is used to avoid drawing attention and triggering automated tracking.
Money Laundering Methods via Tornado Cash
Once the USDC arrived at a single wallet, it was quickly swapped for ETH. The Ether was then deposited into Tornado Cash, a privacy protocol that mixes funds to obscure their origin and destination. This method is widely viewed as a money laundering tactic, as Tornado Cash breaks the linkage between sending and receiving addresses.
Wider Implications for the Crypto Ecosystem
This case highlights persistent efforts to use on-chain mixers to anonymize illicit or privacy-focused transfers. Despite being sanctioned in some jurisdictions, Tornado Cash remains operational and continues to attract significant capital flows. Such fragmented withdrawals from reputable exchanges like Coinbase may pose a significant hurdle for forensic analysis and regulation.
This situation raises questions about the risks associated with mixer usage and the pressure regulators place on cryptocurrency exchanges.
