In recent days, the Tornado Cash smart contract has been at the center of governments and sanctions. So what exactly does Tornado Cash do and is it only used by cybercriminals? We answer these questions in the details of the news.
What exactly is Tornado Cash and how does it work?
Tornado Cash, a privacy smart contract, anonymously transfer money provides an enabling system. In basic logic, Ethereums you send to Tornado Cash pools from your known and traceable wallet, included in the pool it goes through a mixer function and is mixed with other Ethereums inside. You are given a “ticket” for this action., you are given a private key that confirms that the transaction belongs to you, and then you can go to the pool with that key signature and withdraw your Ether to an address that no one knows about you. The system, which provides great anonymity, is especially at the center of attention of users who are obsessed with privacy.
Although the crypto money community, which started with the idea of decentralization, has lost this feature and value in the past, Tornado Cash, Zcash, monero Few smart contracts like this still provide us with this privacy infrastructure.
America destroys what it cannot follow
Although the privacy we mentioned is welcomed by many users, the essence of the matter is states do not like the existence of such a formation. Transfers and completely unregistered transactions outside the control of the states have attracted much more attention and interest with the growing crypto money industry. glaring protocols begins to be called As one of the most serious examples of this, we come across the Tornado Cash story, which has recently been marked by the USA as “belonging to North Korean hacker groups”. Although it is known that the Tornado Cash developer team is not North Korean, this situation is almost to the allegory of stoning the devil being converted. If there’s a working principle that you don’t like, you can attack with traditional methods of blame, applying perception manipulation techniques known to the public seen as the most reasonable option for governments.
Apparently “DeFi (Decentralized Finance) SummerThis story, which started as ” FBI SummerIt evolves towards . Decentralized structures such as Uniswap, Aave, Balancer, Dydx, Oasis Tornado cash after the scandal our personal information directly or indirectly shared with American officials. turns out to be a fact. Besides, it’s already USDT and USDC The most popular stablecoins, such as The process, which started with the Proof of Work system and freedom cries, step by step Proof of Authority It is evolving into a (Proof of Authority) system.
What happened in this process?
Enabling confidential transactions and often named after cryptocurrency thefts Tornado Cashof, recently by the US Department of the Treasury in money laundering used claimed. After this statement by the Ministry US Secretary of State Anthony Blinkena North Korean version of Tornado Cash It’s a hacker group suggested.
Following the developments, carrying out its activities within the scope of the US Treasury Department, Office of Foreign Assets Control (OFAC), August 9 believed to have laundered money through Tornado, together with Tornado Cash. 40 Ethereum your address too sanctions list reported that he received it.
Immediately after Tornado Cash official website has been shut down and Access to open source codes on Github is denied. The main purpose of this blocking is for developers to use the said codes and create a new one. The Tornado Cash fork was to prevent its launch.
Although access to the codes on Github is prohibited, it is known that the codes of Tornado Cash are located on some other open source applications, and users are demanding that a new system be cloned, especially on Twitter, using Tornado Cash’s privacy algorithm.
In this process, US policy makers up to prison sentence Although it has stated that the penalties will be applied to those who use Tornado Cash contracts, it is obvious that such a process full of new and unknown points will not be as easy as they think. It is known that after all bans, an anonymous user, Tornado Cash, sent ether to Ethereum addresses of famous names in the USA via Tornado.
Also on August 10, a Tornado developer is in Amsterdam. taken into custody and as of yesterday, it was announced that he was brought to court regarding the issue. After the recent events, thousands of users protest they replaced their profile picture with Tornado Cash’s logo.
Used many times before as a money laundering tool
We know that the point where governments are pointing fingers is that Tornado Cash is a money laundering system. Well, in which events was the Tornado used for this purpose? Let’s take a quick look at the most important ones:
- Binance Smart Chain Uranium Finance, which uses its infrastructure, announced that it was attacked by a hack. It was reported that hackers stole $ 50 million during the attack. Stolen assets transferred to Tornado Cash pools. The news link is here.
- Ethereum-based Origin DollarIt was announced that 7 million dollars worth of attacks were carried out on . More than $1 million invested by the founder and employees in the project was also stolen as a result of the attack, Origin reported. The stolen assets were transferred to Tornado Cash pools for “laundering”. The news link is here.
- Harvest Finance It was learned that $25 million worth of assets were stolen from the pools and $2.5 million worth of assets were returned. According to the statements, the unidentified attacker attacked via renBTC and Tornado cash, causing FARM to lose 60% of its value. News link is here.
- KuCoin Ethereums stolen from their wallets were allegedly started to be transferred by hackers to the Ethereum mixer, Tornado cash. News link is here.
- One of the most popular blockchain games in the world Axie InfinityThe Ronin bridge used by the players of . was attacked by hackers and 173,600 Ethereum was stolen from the platform. Stolen assets began to be transferred to Tornado pools. News link is here.
So only cybercriminals prefer Tornado Cash?
We have learned that after many cyber attacks before, attackers used Tornado Cash to clean up their seized assets. So, does Tornado Cash only work as a money laundering tool? Looking at the data, the answer to this question is clear. NO. People, contrary to popular belief Tornado Cash is not for money laundering to retain data privacy rights they are using.
dune According to the data received from the platform, transactions taking place on the Tornado network a very small amount appears to be the money laundering activity of cybercriminals. Data states that users mostly use this network to ensure the confidentiality of their transfers. Moreover chainalysis data confirms what was shared by Dune. When the Chainalysis data is analyzed, the transactions made in Tornado pools only 10% consists of stolen assets visible. This forces us to go back to our original topic, A network used for 90% personal data security with a completely manipulated public, making it look like a place where criminals hang out, and ultimately next to the dry, he had to burn at the age leaves him in the middle of a carnage.
It should not be forgotten that in this technology age where the world is being dragged into we have nothing to lose but our blockchains. in 2009 satoshi Carrying the Bitcoin technology, which was put forward as a counter-revolution by B.C. to the future in favor of communities, not states, and building with that vision is waiting to be realized with our efforts.
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