Crypto Criminals Prefer Tornado Cash Above Other Methods For Money Laundering

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Money Laundering
  • CertiK Alert has identified Tornado Cash as the most preferred money laundering method for crypto criminals.
  • Criminals deployed Tornado Cash in over 60 of all 224 incidents recorded in Q1 2024.
  • Digital assets thieves transacted about $69 million via Tornado Cash in Q1 2024.

CertiK Alert, the security platform that monitors blockchain protocols, has identified Tornado Cash as the most used method by malicious actors for laundering stolen funds in the blockchain ecosystem. According to the blockchain tracker, criminals deployed Tornado Cash in over 60 of all 224 incidents recorded in Q1 2024.

Despite being sanctioned by the Office of Foreign Assets Control (OFAC), money launderers preferred Tornado Cash over other methods, including crypto exchanges, BTC transfers, and Railgun.

Meanwhile, CertiK Alert noted that funds were sent directly to exchanges in 47 recorded incidents. The funds sent to exchanges amounted to $220 million, some of which has since been frozen. 

Although criminals used Tornado Cash for most of the fraudulent transactions recorded, CertiK Alert noted that the total sum transacted via this method in Q1 amounted to only about $69 million. Hence, it implies the individual transactions carried out using this method were relatively smaller than those sent directly to exchanges.

Considering that the bulk of the laundered funds passed through exchanges, CertiK Alert highlighted the need for real-time alerting whenever there are suspicious incidents. The blockchain security platform advised companies and organizations to adopt specialized platforms that can help them enhance their compliance, risk management, and anti-money laundering (AML) strategies.

Tornado Cash is an open-source decentralized tumbler that runs on blockchain protocols compliant with the Ethereum Virtual Machine (EVM). It is used for mixing potentially identifiable funds to obscure the trail back to their sources.

Authorities in the U.S. sanctioned Tornado Cash following security implications and the rampant use of the protocol by bad actors. As a result, several decentralized finance (DeFi) applications have banned the use of Tornado Cash on their platforms. Some of them include Aave, Uniswap, dYdX, and Balancer.

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