The blockchain analytics firm Elliptic recently uncovered that the North Korea-backed hacker group Lazarus has once again resorted to using the sanctioned crypto mixer Tornado Cash to obscure its transactions. This surprising move comes after the group had stopped using the crypto mixer last year following US government sanctions. These sanctions were a result of allegations that the group was aiding criminals in laundering illegally obtained digital assets. Despite the decline in volume experienced by Tornado Cash after the sanctions, Lazarus has now turned back to this decentralized mixer due to limited alternatives available.
Unlike centralized mixers that can be targeted and shut down by law enforcement agencies, Tornado Cash operates through smart contracts on decentralized blockchains. This decentralized nature makes it challenging for authorities to curb its operations effectively. Elliptic’s co-founder, Tom Robinson, pointed out that the crackdown on centralized mixers might be redirecting crypto laundering activities towards decentralized alternatives like Tornado Cash.
Elliptic disclosed that Lazarus Group recently transferred around $13 million in funds stolen from the HTX Exploit through Tornado Cash in more than 40 transactions within the last three days. This marks the first movement of these funds since the November 2023 incident. The return of Lazarus Group to Tornado Cash highlights the challenges faced by governments in controlling such decentralized platforms effectively.
Resurgence of Tornado Cash
Data from DeFillama indicates a resurgence of Tornado Cash, with the total value of assets locked in the platform reaching $565 million, its highest level since the US government imposed sanctions in 2022. The protocol’s native TORN token has also experienced an uptrend, trading at around $2, reflecting a 13% increase over the past day. The support from the crypto community and notable stakeholders like Coinbase has boosted the developers’ legal defense in the face of government actions.
The resurgence of Tornado Cash, coupled with Lazarus Group’s return to the platform, underscores the challenges faced by authorities in regulating decentralized crypto mixers effectively. As the crypto landscape continues to evolve, finding ways to address money laundering and illicit activities while preserving financial privacy in decentralized ecosystems remains a complex and ongoing task for regulators and stakeholders alike.
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