According to Bloomberg, the individual who took over control of the cryptocurrency mixer Tornado Cash has relinquished control of the service. However, they utilized the protocol to launder the digital tokens obtained during the attack. The hacker successfully compromised Tornado Cash on May 20, granting them complete control over the mixer. They proceeded to generate 483,000 TORN tokens, which granted them a majority vote within the control system.
On May 26, the attacker expressed their intention to end the attack and return control to the Tornado Cash community. Nonetheless, during their control over the protocol, they exchanged a significant portion of their tokens for Ethereum coins. Subsequently, they laundered approximately $900,000 worth of Ethereum through Tornado Cash.
Experts have observed that prior to the hack, the price of TORN tokens was approximately $6.4. By May 29, the price had dropped to $4, representing a decline of 37% since the attack. CoinMarketCap reports a further 10% decrease in the token’s price within the past 24 hours.
What is Tornado Cash?
Tornado Cash is a decentralized protocol designed for users of the Ethereum blockchain who seek to maintain privacy during their transactions. The Ethereum blockchain is pseudonymous, meaning that while your identity remains hidden, your transactions are publicly traceable. This creates a privacy concern, as anyone can track your activities on the blockchain by linking your transactions to your wallet address using tools like Etherscan.
Moreover, centralized exchanges and other custodians are bound by regulations such as Know Your Customer (KYC) and Anti-Money Laundering (AML) laws. In the event of a data breach, authorities or even hackers could potentially link your personal information to your blockchain transactions. This could enable them to monitor details such as the source of your funds, your balances, and your payments.
In essence, they would have visibility into your entire transaction history on the blockchain. This is where Tornado Cash comes into play, offering a solution that caters specifically to Ethereum and helps resolve the privacy concerns associated with the platform.
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