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Tornado Cash Achieves Over $1.8 Billion in Deposits in the First Half of the Year, Marking a 45% Rise Compared to All of 2023
The well-known crypto mixing protocol Tornado Cash has seen a revival in 2024, with deposits exceeding $1.8 billion during the first half of the year.
This amount represents a 45% increase compared to the total deposits made in the crypto mixer throughout all of 2023, as reported by blockchain analytics firm Flipside Crypto.
The recent increase in Tornado Cash activity follows a period of decline after sanctions were imposed by the US government two years prior.
Tornado Cash Attracts Bad Actors
Recently, Tornado Cash has recorded a significant influx of funds from hackers involved in substantial thefts.
Specifically, the individual responsible for the Poloniex exchange breach, who stole over $100 million last year, has transferred $76 million to Tornado Cash in the last two months, according to Arkham Intelligence.
Moreover, hackers who exploited the HECO Bridge and Orbit Chain have sent $166 million and $47.7 million, respectively, to the mixer this year.
In August 2022, Tornado Cash was sanctioned by the US Treasury due to its role in laundering more than $455 million in cryptocurrency stolen by the North Korea-linked hacking group, Lazarus.
Following these sanctions, monthly deposits to Tornado Cash dropped by over 90%.
Nonetheless, the decentralized nature of the protocol presents challenges for US authorities in effectively overseeing its use.
“Consistent with a general uptick in market activity, mixers have begun to see a resurgence in 2024,” stated blockchain analytics firm Chainalysis in a recent report.
“When looking at the growth of individual mixing services overall, we see that WasabiWallet, JoinMarket, and Tornado Cash have grown the most.”
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Mixing services like Tornado Cash were initially created to maintain privacy, a core principle within the decentralized landscape of cryptocurrencies.
These services aggregate funds from various transactions, complicating efforts to trace them back to their original sources.
As a result, such platforms have become appealing to malicious actors aiming to launder illegally acquired assets.
US House Proposes Ban on Cryptocurrency Mixers
Democratic representatives have put forward the US Blockchain Integrity Act, which seeks to target cryptocurrency mixers.
The proposed legislation aims to disrupt the flow of illicit funds and enhance transparency by forbidding financial institutions, cryptocurrency exchanges, and registered money service businesses from accepting funds processed through a mixer.
Noncompliance could lead to civil penalties of up to $100,000.
This development occurs amid the U.S. government’s ongoing efforts to regulate crypto-mixing services.
Recently, the founder of Bitcoin Fog, a $400 million crypto-mixing service, was convicted of money laundering.
Roman Sterlingov was found guilty of money laundering, conspiracy to commit money laundering, operating an unlicensed money-transmitting business, and violations of the D.C. Money Transmitters Act.
Similarly, Roman Storm and Roman Semenov, co-founders of Tornado Cash, have been indicted.
The indictment accuses them of conspiracy to commit money laundering, conspiracy to violate US sanctions, and conspiracy to operate an unlicensed money-transmitting business.
The post Tornado Cash Surpasses $1.8 Billion in Deposits in H1, a 45% Increase Compared to Entire 2023 appeared first on Cryptonews.
