Crypto mixer Tornado Cash once again finds itself as the nexus of stolen tokens from a decentralized finance (DeFi) protocol, as PeckShield has spotted $500,000 of Dai moving through its pipes.
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Crypto mixers are protocols that obscure the destination of tokens making them harder to track.
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In August 2021, crypto fundraising platform Dao Maker (not related to Maker DAO) suffered a hack that resulted in the loss of $7 million in various stablecoins and ether.
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Immediately after the 2021 hack, on-chain data shows that the funds were sent to two wallets.
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One of the wallets sent approximately 3800 ether ($6.2 million) to Tornado Cash.
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The other wallet, which held the balance, remained dormant until today according to on-chain data.
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Earlier this year Tornado Cash was used to mix $15 million in ether, stolen from Singapore-based Crypto.com.
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Tornado Cash’s frequent nexus to stolen funds triggered a debate if its complicit in money laundering, with its founder saying that the protocol isn’t controlled by any single entity and is designed to be unstoppable.
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In August, the US Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash prohibiting all US persons and entities from interacting with the protocol.
Coinbase is sponsoring a lawsuit to try to get the protocol removed from OFAC’s list.