The blockchain analytics firm Elliptic has reported that the North Korea-backed hacker group Lazarus has once again resorted to using the sanctioned crypto mixer Tornado Cash to conceal its transactions. This comes after a hiatus last year when the group stopped using the crypto mixer following US government sanctions. These sanctions were imposed due to allegations of aiding criminals in laundering illegally obtained digital assets. However, with limited alternatives available after the US government also sanctioned Sinbad.io for similar activities, Lazarus has now turned back to Tornado Cash. Despite the US sanctions, Tornado Cash has continued to operate due to its decentralized nature.
Elliptic disclosed that the Lazarus Group recently transferred approximately $13 million in funds stolen from the HTX Exploit through Tornado Cash in over 40 transactions within the last three days. This marks their first movement of funds since the incident in November 2023. The fact that the group has returned to using Tornado Cash showcases the challenges that governments face in effectively curbing the operations of decentralized mixers. Unlike centralized mixers, Tornado Cash operates through smart contracts on decentralized blockchains, making it difficult to seize and shut down.
Data from DeFillama indicates a resurgence of the Tornado Cash platform, with the total value of assets locked reaching $565 million, the highest level since the US government imposed sanctions in 2022. This resurgence is also reflected in the protocol’s native TORN token, which has seen a 13% increase in value during the past day, trading at approximately $2. The crypto community has shown support for the developers of Tornado Cash, especially after facing legal action from multiple governments, including the US. Notable stakeholders like Coinbase have come forward to support the developers in their legal defense efforts.
The Lazarus Group’s return to using Tornado Cash for money laundering purposes sheds light on the ongoing challenges that regulatory authorities face in tackling illicit activities in the crypto space. The decentralized nature of platforms like Tornado Cash presents unique hurdles for law enforcement agencies, as seen in the group’s ability to evade sanctions and continue its operations. As the crypto landscape evolves, it is crucial for regulators to adapt and find innovative solutions to address these emerging threats effectively.