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According to security companies PeckShield and CertiK, a Tornado Cash transaction with an Ethereum address linked to a DAO Maker exploit from last year encrypted 500,000 DAI stablecoins. In August 2021, DAO Maker, a website for crowd donations, had a breach. A hacker got access to obtain more than $7 million in stablecoins because of a bug in the smart contract of DAO Maker. These funds were distributed across many addresses under the hacker's control. One year after the event, one of the addresses, which Etherscan identified as the DAO Maker's exploiter, transferred DAI stablecoins valued at $500,000 using Tornado Cash. The virtual currency mixer helps hackers hide transactional activity, so they frequently utilize it to transfer stolen funds.
Troubled Crypto Mixer In Public Spotlight
The Office of Foreign Assets Control (OFAC) of the US Treasury Department has approved Tornado Cash, putting it in the public spotlight. Due to the app's potential for money laundering after the sanctions, all people and organizations having US addresses are not permitted to use it.
Hackers' Favorite - Tornado Cash
As witnessed today and in other recent occurrences, Tornado Cash has continued to be used by hackers of decentralized financial protocols even after the penalties were declared. On August 19, PeckShield discovered that an address linked to a December 2021 Grim Finance attack had transferred about $3.3 million into the cryptocurrency mixer. Then, on September 6, the MonoX Finance scammer used Tornado Cash to launder $2.1 million. Tornado was developed to protect the security of Ethereum users, but it also ended up being used by hackers to launder money earned illegally. Since its founding in 2019, Tornado has reportedly been utilized by criminal actors, including North Korea's Lazarus gang, to transact more than $7 billion in cryptocurrency.