Over Half a Billion in Stolen Crypto Laundered Through Tornado Cash in 2024, Report Reveals

A new report from Global Ledger highlights that over $552 million in stolen cryptocurrency was funneled through the notorious mixing service Tornado Cash between January 1 and November 27, 2024. This staggering sum represents more than 60% of all ETH deposits to the platform this year, with a large portion of the funds originating from high-risk sources, including major crypto hacks.

According to the report shared with crypto.news, Tornado Cash received a total of 457,768 ETH, valued at approximately $1.64 billion at current market prices, in 2024. A significant portion of these funds, over 56%, is tied to cryptocurrency hacks that occurred in 2023 and 2024. This marks a noticeable increase from the previous year, during which Tornado Cash handled 314,740 ETH in withdrawals.

Notable Hacks Contributing to the Laundering Surge

Among the largest contributors to Tornado Cash's illicit activity in 2024, the WazirX hack from July stands out, with attackers laundering 61,698 ETH, worth roughly $217.2 million. The second largest contribution came from the Heco Bridge hack, with 52,281 ETH ($189.1 million) laundered through the service. Though the Heco Bridge exploit occurred in 2023, the funds were routed through Tornado Cash in March 2024.

Other significant breaches that funneled funds through the mixer include the Poloniex hack, where 18,874 ETH ($68.4 million) was washed, and the Orbit Chain exploit, which added 12,930 ETH ($46.8 million) to Tornado Cash's pool. Additionally, the Penpie exploit saw 11,261 ETH, valued at $40.8 million, laundered via the platform.

Tornado Cash Faces Scrutiny and Legal Challenges

Tornado Cash has long been a target of scrutiny due to its role in facilitating money laundering. In 2022, the U.S. Treasury Department sanctioned the service for its involvement in processing over $7 billion in illicit funds, including $455 million linked to North Korea’s Lazarus Group.

Recently, however, a U.S. court ruled that the Treasury overstepped its authority by sanctioning Tornado Cash’s immutable smart contracts. While this decision has been hailed by some as a win for the crypto community, the Global Ledger report warns of its potential consequences.

The court ruling is seen as setting a "dangerous precedent" that could undermine global efforts to combat financial crime in the cryptocurrency space. The report suggests that this could embolden bad actors, enabling them to launder even larger amounts of cryptocurrency as regulators struggle to enforce compliance.

Potential Impact on the Industry

The ruling could have far-reaching implications for the broader crypto ecosystem. With regulators potentially facing more challenges in curbing illicit activity, there is concern that stricter regulations may be introduced. This could lead to heightened scrutiny and more stringent reporting requirements for legitimate crypto businesses, ultimately shaping the future of the industry.

As the crypto space continues to evolve, the risks posed by money laundering and the role of services like Tornado Cash remain a significant concern for regulators, investors, and industry players alike. The ongoing legal battles and regulatory developments will likely influence the future landscape of cryptocurrency compliance and enforcement.