Tornado Cash sees renewed activity as $50M laundered in September

Tornado Cash (CRYPTO:TORN), a crypto mixing service sanctioned by the U.S. government, has experienced a surge in usage this month, with hackers laundering $50 million in stolen cryptocurrency through the platform.

According to blockchain analytics firm SpotOnChain, four hackers moved a total of 20,561 ETH (CRYPTO:ETH), worth approximately $50 million, through Tornado Cash in September, despite the sanctions imposed in 2022.

The laundered funds are tied to several major breaches involving cryptocurrency projects such as Penpie (CRYPTO:PNP), WazirX (CRYPTO:WRX), Bo Shen, and LiFi.

The hacker behind the Penpie attack, for instance, transferred 11,261 ETH, valued at about $26.7 million, through Tornado Cash.

Penpie, a decentralized finance (DeFi) platform, had offered a 10% bounty for information leading to the recovery of the stolen assets, but the hacker chose to launder the entire amount.

Similarly, the hacker responsible for the WazirX breach moved 7,600 ETH, worth $18.51 million, through the platform.

WazirX, a major crypto exchange, suffered a $235 million hack in July, which led to a temporary halt in its operations.

This incident has been linked to the North Korea-backed Lazarus Group.

Despite laundering some of the stolen assets, the hacker still holds 54,155 ETH, valued at approximately $123 million.

Additionally, hackers associated with Bo Shen and LiFi transferred 1,500 ETH and 200 ETH, respectively, totaling $4 million, into Tornado Cash.

These activities highlight the continued reliance on Tornado Cash for laundering stolen assets, even after sanctions were imposed to limit its use.

Although activity on the platform declined following the sanctions, recent data shows a resurgence in its use for illicit activities.

Amid these developments, legal challenges to the sanctions against Tornado Cash are emerging.

Crypto attorney Josh Lawler pointed out that the Fifth Circuit Court has expressed skepticism about treating open-source software like Tornado Cash as an "entity" that can be sanctioned.

This debate arises alongside the U.S. government's criminal case against Tornado Cash co-founders Roman Semenov and Roman Storm, who are accused of conspiring to launder money and facilitate transactions with sanctioned entities.

At press time, the Tornado Cash (TORN) price was $2.11.