~$552.8M from Top 5 Hacks Laundered via Tornado Cash in 2024

In a landmark decision on November 26, 2024, the U.S. Court of Appeals for the Fifth Circuit ruled that the Treasury Department’s sanctions against Tornado Cash were unlawful. The court determined that the Treasury “overstepped its authority” by targeting the open-source software itself, rather than specific individuals or entities misusing it. 

However, the mixer poses significant AML risks. 

Top 5 hacks that used Tornado Cash for money laundering in 2024 

The Global Ledger research shows that from January 1, 2024 to Nov 27, 2024, Tornado Cash received 457,768 ETH (about $1.6 billion at the time of writing). Over 60% of sources of these funds are high-risk. More than 56% come from hacks.

A significant portion of these funds come from crypto crimes such as WazirX and Poloniex hacks and Heco Bridge, Orbit Chain, and Penpie exploits. 

GL Counterparty report showing transactions to Tornado Cash. Jan 1, 2024 – Nov 27, 2024

1. WazirX hack

Amount stolen: $235 million 

Sent to Tornado Cash: 61,698 ETH (~$217.2 million at the time of writing)

2. Heco Bridge hack

Amount stolen: $86.6 million (in 2023)

Sent to Tornado Cash: 52,281 ETH (~$184.1 million at the time of writing)

3. Poloniex hack

Amount stolen: $125 million 

Sent to Tornado Cash: 18,874 ETH (~$66.4 million at the time of writing)

4. Orbit Chain exploit

Amount stolen: $81 million

Sent to Tornado Cash: 12,930 ETH (~$45.5 million at the time of writing)

5. Penpie exploit

Amount stolen: $27 million

Sent to Tornado Cash: 11,261 ETH (~$39.6 million at the time of writing)

Tornado Cash 2024 ruling could have far-reaching consequences for the industry

Tornado Cash has been widely used to obfuscate transactions, enabling cybercriminals, hackers, and sanctioned entities to launder stolen funds like the Lazarus Group, North Korean hackers. 

The court decision poses risks to the industry by creating a dangerous precedent that could undermine global efforts to fight financial crime in the crypto space:

• The ruling could increase money laundering activities. As regulators struggle to enforce compliance, bad actors may launder even larger amounts of cryptocurrency, knowing the infrastructure to mask their transactions remains largely untouchable.
• The court’s decision could raise concerns about the use of cryptocurrencies in illegal activities, making investors and banks less confident in the industry’s legitimacy. 
• Regulators might seek to close these enforcement gaps with stricter rules, which could mean legitimate businesses face heightened scrutiny and tighter reporting requirements.