Tornado Cash Sees Unexpected Deposit Surge Despite Sanctions

Tornado Cash, the crypto mixer under sanction, has experienced a notable increase in deposits despite its legal and regulatory issues.

In the first half of 2024, the service attracted $1.9 billion in deposits, a 50% rise from the previous year.

Sanctioned by the U.S. Office of Foreign Assets Control (OFAC) in August 2022 for its role in laundering funds for North Korean hackers, Tornado Cash has been restricted from interacting with regulated exchanges. This makes it difficult for users to convert assets into fiat currency.

Despite these restrictions, Tornado Cash remains a preferred tool for illicit activities. Recent data shows significant transfers from various hacking operations, including $76 million from the Poloniex exchange hack and substantial amounts from the HECO Bridge and Orbit Chain breaches.

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The service’s continued popularity has prompted a lawsuit arguing that the sanctions infringe on constitutional rights and free speech. This legal challenge is backed by major crypto firms and advocacy groups.

The founders of Tornado Cash face their own legal battles: Alexey Pertsev is serving a prison sentence in the Netherlands, Roman Storm is out on bail in the U.S., and Roman Semenov is still at large.

Alexander Stefanov