Tornado Cash Records $1.9B in Deposit for H1 2024 Amid Sanctions

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The prominent crypto mixer Tornado Cash has recorded a spike in volume via new deposits amid OFAC sanctions. The platform completed over $1.9 billion in transactions within the first half of 2024.

This increased volume of new deposits on the platform highlights a 50% increase from the net deposits recorded throughout 2023. Also, it reflects the growing interest in anonymity among crypto participants.

Tornado Cash a Growth in New Deposit Growth in H1 2024

Tornado Cash, the OFAC-sanctioned crypto mixer, continues to record a massive increase in transaction volume. Data from Flipside Crypto, an on-chain analytics intelligence firm, revealed that the crypto mixer witnessed over $1.9 billion in new deposits within the first half of 2024.

Further, the data indicated that the platform recorded a 50% spike in its total deposits in 2023.

For context, Tornado Cash is a crypto mixer that offers anonymity for crypto transactions. It allows users to conceal the origin and destination of their crypto transactions.

The crypto mixer can facilitate legitimate user transactions by protecting their private data and shielding them from fraudsters. However, it has also become a stop-point for criminals to conceal illicit deals.

Usually, most bad actors use the platform for money laundering and terrorist financing. Moreover, Tornado became a call-on point for notorious hackers, including the North Korean Lazarus Group.

In 2022, the Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash. The sanction came after Lazarus Group used the platform to launder about $455 million of illicit assets.

With its sanction, OFAC places any wallet that interacts with Tornado on a blacklist. This action bans the account from legally compliant crypto platforms and exchanges, hindering withdrawals from CEXs.

Tornado Remains the Stop-Point For Money Laundering in Crypto

Amid OFAC’s sanction, Tornado maintained its popularity and high transaction volumes in crypto deposits. Major hacking groups are still using the crypto mixer to launder their illicit funds.

Data from blockchain analytics company Arkham Intelligence disclosed that Poloneix exchange hacker used Tornado Cash. In May, the exploiter carted away $100 million from the exchange and moved about $76 million to the crypto mixer.

Similarly, the HECO Bridge attacker used Tornado Cash to transfer $166 million of the stolen funds. Also, Arkham Intelligence reported that the hacker behind Orbit Chain moved $48 million in assets to the crypto mixer. 

Even in this second half of the year, bad actors’ rate preference for Tornado Cash remains high.

On July 18, an Indian-based crypto exchange, WazirX, recorded an exploit and lost $234.9 million from its Multisig wallet. Later, a security intelligence firm confirmed that the hacker used Tornado Cash to transfer the funds to a wallet address.

Meanwhile, some prominent crypto personalities have filed a lawsuit challenging the OFAC’s sanction against Tornado Cash in 2022. 

The ongoing case has support from several crypto-related companies, including Coinbase, The Blockchain Association, and Coin Center. 

According to the suit, the plaintiffs stated that the sanctions reflect unlawful and unconstitutional acts. They pointed out that the ban on the platform violates the US constitutional right of free speech since it doesn’t exist as an entity or country.