Blockchain security company CertiK discovered that 311 ETH, or roughly $959,000, were moved to Tornado Cash from two wallets linked to the CoinStats attack in June. 100 ETH was sent to the cryptocurrency mixer by one wallet, while 211 ETH was moved by another. On June 22, CoinStats revealed a security breech impacting iOS users who were tricked into believing they were receiving a reward. The business quickly halted its attempt to stop the breach and verified that the attack was controlled, affecting only 1,590, or 1.3% of all of its wallets. Users were also reassured by CoinStats that centralised exchanges (CEXes) and linked wallets were safe.

In a more recent update on July 5th, the company said that the incident is still under investigation but did not disclose any further details on whether law enforcement authorities have been roped in.

“We are still investigating the security incident on June 22 and taking rapid and committed actions to ensure the security of our new infrastructure. We are working hard to share additional information as soon as we can, including measures to support any victims.”

Tornado Cash Devs’ Legal Firestorms

Even with major crackdowns and legal challenges, Tornado Cash is still commonly used for money laundering. The US Department of the Treasury placed the service on a blacklist in August 2022, making it illegal for US individuals, residents, and businesses to utilise it. Both the project’s GitHub and web domains were closed. Subsequently in the same month, Alexey Pertsev, the developer of Tornado Cash, was taken into custody in Amsterdam on charges of aiding in the concealment of illicit financial activities and enabling money laundering via the Ethereum mixing service. Last May, Pertsev received a prison sentence of five years and four months.

A few months later, two more Tornado developers, Roman Storm, and Roman Semenov, were charged with aiding $1 billion in money laundering. The former was arrested in Washington State.