Tornado Cash, a popular privacy-oriented mixing service, was thrust into the spotlight in September 2021 following its sanction by the US Treasury Department's Office of Foreign Assets Control. This restriction prevents any US-based individuals and organizations from engaging with the application as it's believed to have a severe risk related to money laundering. The recent movement of funds could indicate an attempt to sidestep the sanctions.
More recent events point to a DAO Maker exploitation from 2021 that has just come to light. A wallet connected with the exploiters sent out a bulk of $600,000 in stablecoins to Tornado Cash, reported PeckShield, a security firm. This was the first time that wallet was active in over 200 days.
In August of 2021, a bug in the DAO Maker platform allowed a single exploiter to take hold of more than $7 million in stablecoins. The exploiters spread out the funds amongst several wallets. A separate wallet linked with the DAO Maker exploiters sent away $500,000 worth of DAI using Tornado Cash during the same month.
Given the recent activities related to the DAO Maker exploiters, and the previous sanctions on Tornado Cash, it is safe to assume the movement of funds could be an attempt to bypass the US Treasury Department's restrictions. It remains to be seen how the exploiters will progress from here, and if further action will be taken by the Office of Foreign Assets Control.
Kate Moore
- 2023-04-14
Is Tornado Cash Exploited to Bypass US Sanctions?
In September of 2021, Tornado Cash was sanctioned by the US Treasury Department's Office of Foreign Assets Control. In recent months a DAO Maker exploiters wallet was used to send $600,000 and additional $500,000 in stablecoins to Tornado Cash, indicating an attempt to bypass sanctions.
