Recent reports from blockchain analytics firm Elliptic have uncovered that the North Korea-backed hacker group Lazarus has once again resorted to using the sanctioned crypto mixer Tornado Cash to conceal its illicit transactions. This move comes after a hiatus following US government sanctions imposed on the group for their alleged involvement in aiding criminals to launder illegally obtained digital assets.
Impact of US Sanctions
The sanctions led to a drastic decline in Tornado Cash’s overall volume, as hackers sought out alternative platforms like Sinbad.io and cross-chain bridges to carry out their transactions. However, the recent crackdown on Sinbad.io by US authorities for its role in facilitating money laundering for North Korean state-sponsored hacking groups has limited options for Lazarus, prompting their return to Tornado Cash.
Despite the US government’s efforts to curb the operations of Tornado Cash, the decentralized nature of the platform has made it difficult to shut down. Elliptic’s co-founder, Tom Robinson, noted that the takedowns of centralized mixers by law enforcement agencies may be pushing crypto laundering activities towards decentralized alternatives like Tornado Cash.
Recent Movements and Consequences
Elliptic’s findings revealed that the Lazarus Group has successfully moved approximately $13 million in funds stolen from the HTX Exploit through Tornado Cash in a series of over 40 transactions within the span of three days. This marks the first movement of these funds since the incident in November 2023, indicating the group’s persistence in utilizing the platform despite regulatory obstacles.
Resurgence of Tornado Cash
Data from DeFillama indicates a resurgence of Tornado Cash, with the total value of assets locked reaching $565 million, the highest level since the imposition of US sanctions in 2022. This resurgence is mirrored in the protocol’s native TORN token, which saw a 13% increase in value over the past day, trading at approximately $2 at the time of publication.
Despite facing legal actions from multiple governments, including the US, the developers behind Tornado Cash have received backing from notable figures in the crypto community. Companies like Coinbase have lent their support to the developers’ legal defense, highlighting the importance of upholding decentralization and privacy in the face of increasing regulatory scrutiny.
The resurgence of Lazarus Group’s use of Tornado Cash underscores the challenges faced by regulatory authorities in combating illicit activities in the decentralized crypto space. The ongoing struggle between regulators and crypto users highlights the need for innovative solutions and increased cooperation between industry players to address these complex issues effectively.