The recent findings by blockchain analytics firm Elliptic have shed light on the fact that the North Korea-backed hacker group Lazarus is once again utilizing the sanctioned crypto mixer Tornado Cash to obscure their transactions. Despite ceasing the use of Tornado Cash last year following US government sanctions, Lazarus has now resorted back to this method due to limited alternatives available after Sinbad.io was also sanctioned for facilitating money laundering activities of North Korean state-sponsored hacking groups. The decentralized nature of Tornado Cash has allowed it to remain operational despite these sanctions, providing a safe haven for hackers like Lazarus to move their illicitly obtained funds.
According to Elliptic, Lazarus Group recently transferred approximately $13 million in funds stolen from the HTX Exploit through Tornado Cash in over 40 transactions within the last three days. This marks their first movement since the November 2023 incident and highlights the ongoing challenges faced by governments in curbing the operations of decentralized mixers. The inability to seize or shut down platforms like Tornado Cash due to their operation through smart contracts on decentralized blockchains poses a significant hurdle for law enforcement agencies.
Data from DeFillama suggests a resurgence of Tornado Cash, with the total value of assets locked reaching $565 million – the highest level since the US government imposed sanctions in 2022. The protocol’s native TORN token has also seen a significant uptrend, trading at roughly $2 and experiencing a 13% increase in value during the past day. This resurgence in activity indicates a renewed interest in decentralized alternatives for money laundering activities, as highlighted by Elliptic’s Tom Robinson who mentioned the pushback towards decentralized options in light of crackdowns on centralized mixers by law enforcement agencies.
Despite facing legal actions from multiple governments, including the US, the developers behind Tornado Cash have received support from notable crypto stakeholders like Coinbase. The rallying of the crypto community behind the project’s developers underscores the importance of maintaining innovation and accessibility in the blockchain space, even in the face of regulatory challenges. The continued use of platforms like Tornado Cash by hacker groups like Lazarus Group raises concerns about the effectiveness of current regulatory measures and the need for collaborative efforts to address the evolving landscape of illicit financial activities in the cryptocurrency space.