Tornado Cash

Tornado Cash is a software tool primarily used in the realm of decentralized finance. It functions as a privacy-preserving protocol, allowing users to send or mix cryptocurrency in a manner that obscures the link between the sender and receiver addresses. However, this feature has also made it an attractive tool for illicit activities such as money laundering. The service's deposit notes act like private keys, crucial for accessing and managing funds within the system. Despite its potential misuse, Tornado Cash continues to be recognized for its innovative contribution to financial privacy. The Lazarus APT group, known for its cyber-espionage and financially motivated attacks, notably returned to Tornado Cash to launder stolen funds. This highlighted the software's vulnerability to exploitation by malicious actors. As a result of such incidents, Tornado Cash faced intense scrutiny and even sanctions from the Office of Foreign Assets Control (OFAC). This led to some entities, including North Korea, pivoting from Tornado Cash to alternatives like Sinbad and BitMixer. In the aftermath of these events, one of the developers of Tornado Cash was sentenced to 64 months in prison. Meanwhile, despite the enforcement actions and sanctions against Tornado Cash, the open-source codebase of the software continued to exist independently. This has led to the emergence of new, shadowy mixing services using the same foundation as Tornado Cash, indicating the persistence of such tools in the face of regulatory challenges.