Tornado Cash Reigns Supreme on Ethereum

Despite facing sanctions from the U.S. Treasury in August 2022, Tornado Cash continues to dominate as the premier crypto mixer on the Ethereum network. 

Recent data from crypto analytics firm Arkham reveals that a staggering $77.35 million in assets passed through Tornado Cash contracts on the Ethereum Mainnet in just the last month.

An impressive comeback  

The mixer, which operates across seven different chains, has made a name for itself by allowing users to obfuscate transfers of ten distinct crypto assets, with native ETH on the Ethereum mainnet being the most popular. 

At its height in July 2021, Tornado Cash managed more than $700 million of ETH in its pool contracts. The platform did experience a significant setback post-sanctions, with assets plummeting by over 60% and a substantial decrease in transfer volume. 

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Notably, this downturn was only temporary, as both total value locked (TVL) and transfer volume showed signs of recovery, even amidst the arrest of two of Tornado’s three founders. 

At present, Tornado's TVL sits at approximately 118.3K ETH, equivalent to about $187.9 million, according to data provided by Arkham. 

Under scrutiny

As reported by U.Today, the U.S. Treasury sanctioned the cryptocurrency mixing service Tornado Cash, accusing it of enabling the laundering of funds linked to North Korea's Lazarus Group. Despite Tornado Cash's claims of being a tool for preserving financial privacy, the Treasury alleges it facilitated illicit transactions, including the laundering of $445 million stolen by Lazarus. Tornado Cash developers, Roman Storm and Roman Semenov, were charged with aiding in laundering over $1 billion, with Storm being arrested.

A Coinbase-backed group has lost a lawsuit challenging the U.S. Treasury Department's actions against the popular mixer. Judge Robert Pitman has ruled that Tornado Cash is a recognizable entity with property interest in its smart contracts.

The U.S. government's sanctions against the decentralized service Tornado Cash emphasize the challenges of shutting such services down entirely since programmers utilize its open-source code to develop similar programs.