Tornado Cash linked to major laundering operations in Q3 2024

According to a recent report from CertiK, Tornado Cash has been used in several other high-profile money laundering cases. In the third quarter of 2024, Tornado Cash was used to launder 30 out of 156 incidents, or $287 million of the stolen funds. 

The report further stated that 66 of the breaches’s funds were never recovered. The total financial loss rose by 9.5%, with investors suffering $753 million in losses from 155 different cybersecurity incidents. The Ethereum network got the most hits of these attacks, with 86 occurrences of hacks, which led to the loss of more than $387 million.

Tornado Cash facilitates anonymity in Ethereum transactions

Tornado Cash is a decentralized mixer that makes it possible to anonymize transactions on the Ethereum blockchain. Making it a go-to platform for cybercriminals seeking to launder stolen cryptocurrency. Tornado Cash has recently been linked to several major hacks. A recent example is the WazirX crypto exchange hack, through which $230 million was stolen and funneled via Tornado Cash.

In this case, the hackers transferred $33 million worth of Ethereum through the mixer and then proceeded to transfer more funds through several more wallets. This process made the funds very hard to track, making it very challenging to get the funds back. Other examples include the September DeltaPrime hack, where $5.93 million was laundered through Tornado Cash.

Other North Korean hacking groups, such as Lazarus, have also been known to use Tornado Cash. In March 2024, the United Nations report unveiled that North Korean hackers used the platform to clean $147.5m of stolen cryptocurrency.

Legal actions target Tornado Cash and its founders

Tornado cash has been in the spotlight, especially on the legal front, due to its association with money laundering services. Last year, the US authorities accused them of helping launder more than $1bn, some of which was stolen by North Korean hackers. This was after the U.S. government had banned Tornado Cash in 2022.

In May, Tornado Cash co-founder Alexey Pertsev was convicted of money laundering charges and handed a 64-month prison sentence by a Dutch court. Pertsev was arrested in August 2022 and had been in jail for the past few years before his sentencing.

Other co-founders, Roman Storm and Roman Semenov, are also charged in the U.S. for facilitating Tornado Cash, including sanctions evasion and money laundering. Last month, Judge Katherine Polk Failla of the Southern District of New York was said to have denied the motion to drop the charges against Roman Storm.