Is Tornado Cash Illegal? WazirX Hacker Transferred 2500 ETH Tokens

After the cyberattack on the WazirX, the attention is now on how the stolen cryptos will move. The cyber security team in India and Singapore are continuously eyeing the stolen WazirX funds and just recently tracked the 2500 ETH transaction from the WazirX hacker’s wallet address to the Tornado Cash. This is the first lead on the stolen fund’s situation.

One of the biggest cryptocurrency platforms, the WazirX exchange, has been under a major cyber attack, stealing more than $235 Million worth of crypto assets, majorly in Ethereum and ERC-20 tokens. The hackers and the method of the hack are still unknown and no crypto has been recovered till now. The biggest update is from Zeittai, as they have filed for Meroratrim in Singapore to work on the restructuring plans. However, this new lead has turned the situation more concerning as the Tornado platform is known for breaking the connection between sender and receiver, making it hard to track the transaction.

Is Tornado Cash Illegal?

Tornado cash is a program where deposits and withdrawals happen from the pooled cryptos funds. More importantly, it breaks the connection or record of the sender and receiver information. Here, the users deposit their cryptos in a shared pool, breaking the transaction. Then, the user can withdraw the cryptos from the pool, initiating a new transaction with the transaction key.

It was built to offer more privacy in crypto transactions, but the bad actors use it for crypto laundering and removing their tracks. However, the officials took notice and sanctioned Tornado platform, making it illegal in the United States. This happened in August 2022, when the US Office of Assets Control (OFAC) connected the platform to money laundering and put sanctions to prevent criminals from using it to launder money.

Up to now, the platform might have assisted in laundering more than $7 billion worth of cryptos since 2019. Because of this, US citizens or companies based in the country cannot use this platform. However, despite the sanctions and bans, it is operated and widely used in many parts of the world. And now, this is also being used by the WazirX hacker to run away with the stolen cryptos.

This revelation came after Spotonchain, a popular analytics platform, revealed the exploiter moving 2600 ETH (worth $6.54 Million) to Tornado Cash. The analytics platform also revealed that the hacker still holds 59,156 ETH ($148.8M) across nine wallet addresses.

WazirX Hacker Transferred 2500 ETH To Tornado Cash

In a recent WazirX Townhall meeting, the Zettai founder Nischal Shetty revealed how they have approached 500 crypto exchanges to block any transactions from the hacker’s wallet addresses. It was to stop the movement of the stolen funds and attempt recovery. However, the WazirX hacker has used an illegal platform, to move 2500 ETH worth more than $6.5M.

🔴 The #WazirX Exploiter transferred 2,600 $ETH ($6.54M) to #TornadoCash 11 hours ago.

Currently, the hacker still holds 59,156 $ETH ($148.8M) across 9 wallet addresses!

Will there be an $ETH sell-off soon? Follow @spotonchain and set alerts for #Ethereum and the #WazirX entity… https://t.co/KQfDDs5too pic.twitter.com/rzHd4wXzFx

— Spot On Chain (@spotonchain) September 3, 2024

Additionally, Arkham Intelligence has revealed the hacker carried 26 transactions, each containing a 100 ETH quantity to transfer these 2600 ETH. These small transactions were to secretly execute the transfer without getting much attention, as bigger transactions are more noticeable.

This transfer to this platform might give a path for the WazirX hacker to run free with these transactions. However, what is more concerning is the deposition of these many Ethereum tokens can impact the ETH price heavily. Ethereum, the second biggest cryptocurrency is currently trading at $2.5K and is struggling in the market.

Final Thoughts

After a major attack on India’s biggest cryptocurrency exchange, WazirX, the hacker has now moved the 2500 ETH tokens to Tornado Cash. The hacker made 26 transactions, each carrying 100ETH, to hide its trails with this illegal platform. The officials sanctioned the platform in 2022, prohibiting US citizens and companies from being involved with this. This is due to the rising cases of crypto laundering, involving this platform. The reports reveal that it has assisted in laundering more than $7 billion related to crypto scams.