Crypto News- Tornado Cash Resurgence Observed Amidst Sanctions
Crypto News– Tornado Cash, the crypto-mixing protocol, has seen a notable resurgence in 2024 after a sharp decline in activity due to U.S. government sanctions imposed two years ago. The sanctions, enacted by the Office of Foreign Assets Control (OFAC) in August 2022, initially caused monthly deposits to plummet by over 90%. However, despite these sanctions, Tornado Cash is once again gaining traction in the crypto community.
Tornado Cash Sees Resurgence Despite Sanctions
Despite being sanctioned by the U.S. government in 2022, Tornado Cash, the crypto-mixing protocol, has experienced a significant resurgence in 2024. Recent data from blockchain analytics firm Flipside Crypto reveals that the protocol received over $1.9 billion in deposits in the first half of 2024 alone, marking a 50% increase from the total deposits throughout 2023.
This resurgence has been fueled in part by inflows from hackers involved in major exploits. According to Arkham Intelligence, the hacker behind last year’s Poloniex exchange theft, which amounted to over $100 million, has funneled $76 million into Tornado Cash in the past two months. Similarly, the exploiters of HECO Bridge and Orbit Chain have transferred $166 million and $47.7 million, respectively, to the mixer this year.
Tornado Cash’s decentralized nature poses a significant challenge for U.S. authorities trying to regulate its use effectively, allowing it to remain a popular choice among those seeking to obscure their transactions.
Resurgence of Mixing Services
A recent report by blockchain analytics firm Chainalysis highlights a notable increase in market activity and a resurgence of mixing services in 2024. The report states, When looking at the growth of individual mixing services overall, we see that WasabiWallet, JoinMarket, and Tornado Cash have grown the most.
In August 2022, the Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash after it was revealed that the North Korean hacking group Lazarus had used the protocol to launder approximately $455 million in illegal funds. The OFAC sanctions mandate that anyone engaging with Tornado Cash would be placed on a blacklist, preventing their wallet from being accepted at any legally compliant crypto exchanges.
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