Tornado Cash is a decentralized mixer used to anonymize transactions on the Ethereum network. Recently, it has been linked to several major hacks and money laundering incidents.

Anonymizing Transactions with Tornado Cash

Tornado Cash is a decentralized mixer that anonymizes transactions on the Ethereum blockchain. This makes it a popular tool for cybercriminals looking to launder stolen cryptocurrency. An example is the recent WazirX crypto exchange hack, through which $230 million was funneled via Tornado Cash. This process makes tracking the funds and their recovery very challenging.

Involvement of Hacking Groups with Tornado Cash

North Korean hacking groups, such as Lazarus, have also actively used Tornado Cash for laundering funds. In March 2024, a UN report revealed that North Korean hackers cleaned $147.5 million of stolen cryptocurrency through the platform. Other incidents, like the DeltaPrime hack in September, showed a similar pattern with $5.93 million laundered through Tornado Cash.

Legal Actions Against Tornado Cash and Its Founders

Tornado Cash has long been under legal scrutiny for alleged involvement in money laundering. In 2022, the US government banned the platform. In May, co-founder Alexey Pertsev was convicted in the Netherlands for money laundering charges and sentenced to a 64-month prison term. Other co-founders, such as Roman Storm and Roman Semenov, also face charges in the US. Recently, Judge Katherine Polk Failla denied Storm's motion to dismiss charges of sanction evasion and money laundering.

Tornado Cash remains a significant topic due to its repeated use in money laundering incidents. However, legal actions against its founders indicate that authorities are serious about combating the illegal use of such platforms.