Report highlights persistent use of Tornado Cash in financial crimes

Tornado Cash seems to be the choice of money laundering process for those who use cryptocurrencies. on the OFAC’s sanctions list according to the latest report from CertiK Alert. In the first quarter 2024, as shown in Tornado Cash’s analysis, out the 224 recorded incidents, the application was employed in 60 that emphasizes its wide use in the blockchain-based financial crime terrain.

The preferred tool for crypto  scam,Tornado Cash

The Tornado Cash is the name that the developers have chosen for the Ethereum Virtual Machine (EVM) implemented decentralized cryptocurrency mixer. This feature anonymizes the origins of any transaction related to cryptocurrency funds regardless of their way of identification, thus serving as a covering for those looking to cloud the tracks that lead to the resource.

Methods beyond offline banking systems are crucial, hence, they should be powered with AML techniques to eradicate assets tracking by individuals to escape the punishments society has.

Despite Tornado Cash being fountainspring of such events, money flows directly to exchange took up the largest part of the amount involved. With CertiK Alert noting that these transactions contributed close to $220 million to the clandestine money kitty, the authorities came up with a plan to freeze some amount. 

#CertiKInsight 🚨

Of the 224 incidents we recorded in Q1 2024 we examined the most common methods of laundering stolen funds.

Despite being sanctioned by OFAC, @TornadoCash was still used by malicious actors in the majority of incidents pic.twitter.com/KL58xcseeQ

— CertiK Alert (@CertiKAlert) April 18, 2024

On the contrary, lion share ($ 69 million) was already laundered through Tornado Cash. Clearly, it turns out to be that the extensity of Tornado Cash is bigger but its average size of the single transaction is smaller compared to that of a direct transfer.

Regulation of the aviation industry and its consequences

The continued run of the Torndao Cash by the criminals despite the sanctions brought by the U.S. authorities don’t has nothing to do with the subness facing the regulators and the enforcement agencies in the digital age that are aimed at curbing the illegal financial transactions. 

Caused by the sanctions, its ban on popular decentralized finance (DeFi) platforms reached as far as those same influential platforms such as AAVE, Uniswap, dYdX, and Balancer.

Developing real-time alerts as a key method to immediately identify and act upon individuals’ suspicious transactions is the primary concern of CertiK Alert at present.

To combat the ever growing problem of well-advanced wallets like the Tornado Cash being used, they recommend new and strict surveillance and compliance rules. Crypto industry should bear in mind that it has an obligation to put in place technological advancements as well as strict monitoring standards in order to prevent misuse of its platforms especially for purposes of money laundering and other fraudulent activities.

This is because the development and the methods used by criminals in the sector keep on changing as the virtual finance space continues to evolve hence the industry and regulators must stay alert by existing ahead of them. 

The lasting task is to keep finding the equilibrium point between the urgency for safety and the fulfillment of the public interest requirements in a financial transactions environment of increasing innovation and technology development.