Following American sanctions, Tornado Cash’s overall usage fell by 90%, according to a report released on Wednesday by blockchain analytics company TRM Labs.In August 2022, the Office of Foreign Asset Control (OFAC) of the U.S. Treasury Department blacklisted Tornado Cash on the grounds that it was a crucial tool used by criminals to launder money.With the help of Tornado Cash, users of the Ethereum, BNB Chain, Arbitrum, Avalanche, and Optimism networks can swap tokens while hiding their wallet addresses.Although the service itself is not malicious, cryptocurrency fraudsters are increasingly using it to hide the trail of money they have stolen.
According to the US Department of Justice, Lazarus, a group of North Korean hackers, utilized the service to launder more than $1 billion in illegal payments.
“Though the government’s actions have crippled Tornado Cash’s service, a few illicit actors aren’t deterred, showing that while the sanctions were a hurdle, they weren’t a full stop for all nefarious activities,” the report stated.
The crypto community criticized the sanctions in major part, but it had little effect.A group of cryptocurrency investors and developers who claimed the Treasury Department exceeded its power lost a Coinbase-funded lawsuit in August.While North Korean hackers have generally switched to other Bitcoin mixers, some unauthorized usage of Tornado Cash has persisted, according to TRM experts.
“Though the government’s actions have crippled Tornado Cash’s service, a few illicit actors aren’t deterred, showing that while the sanctions were a hurdle, they weren’t a full stop for all nefarious activities,” the report stated.
According to the research, Tornado Cash processed nearly $2.8 billion in transactions from February to July 2022, but only $425 million during the same time period in 2023.The crypto community criticized the sanctions in major part, but it had little effect.A group of cryptocurrency investors and developers who claimed the Treasury Department exceeded its power lost a Coinbase-funded lawsuit in August.