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Despite US sanctions: crypto mixer Tornado Cash remains popular

 


The US Treasury Department has been sanctioning crypto mixer Tornado Cash since August 2022. However, that doesn't stop people from continuing to use the popular privacy tool.


The crypto mixer Tornado Cash is based on the Ethereum Virtual Machine and allows users to obfuscate the connection between a source and destination address.


How the sanctions affect Tornado Cash

According to information portal Dow Jones , the Treasury Department considers a person violating Treasury Department sanctions to be a criminal . In addition, the Treasury Department can impose a fine of a few thousand to several million US dollars or imprisonment for up to 30 years for a violation.


The severe penalties under the sanctions may have affected the flow of stolen funds. Hackers have already begun to use alternatives such as 3CRV Pool to avoid getting on the US Treasury Department's sanctions list. Nevertheless, numerous hackers still use the crypto mixer Tornado Cash.


Last week, for example, the yield farming protocol TempleDAO was hacked. The hackers stole over $2.34 million worth of crypto and laundered the stolen funds using Tornado Cash. They conducted over 21 different transactions sending 1,921 Ethereum .


In early September, crypto analytics firm PeckShield discovered that a hacker was also using Tornado Cash to transfer over 500,000 DAI tokens after attacking DAO Maker. Additionally, in another hack in September, a hacker used Tornado Cash to send over 720 ETH. In this attack, the hacker exploited a vulnerability in an Ethereum vanity address generated with the Profanity tool.


At the time of writing, the value of assets locked in Tornado Cash is still over $172 million , according to DappRader . However , Tornado Cash 's monthly user base has dropped by over 50 % since the sanctions .


Crypto community defends itself against sanctions

The crypto community didn't exactly welcome the sanctions. Coin Center, a nonprofit crypto organization, is even suing the US Treasury over the Tornado Cash sanctions . Crypto exchange Coinbase is funding the lawsuit against the US Treasury Department , which currently includes six plaintiffs, including Coinbase employees.


Additionally, some community members sent small amounts of Ethereum to sanctioned addresses to troll the authority.

To the crypto community, Tornado Cash is simply open source and publicly available infrastructure that criminals are abusing. The Ethereum founder Vitalik Buterin also campaigned for the crypto mixer, which in his opinion does not in itself represent anything criminal .


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All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at their own risk.

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