North Korean hackers have increasingly favored Bitcoin (BTC) mixers over Tornado Cash (TORN) since U.S. authorities imposed sanctions on the cryptocurrency mixer, according to blockchain analytical firm TRM Labs.
Last year, the U.S. Treasury enacted sanctions against Tornado Cash over allegations that it helped criminals launder their illegally acquired digital assets. This move effectively banned mainstream access as users deserted the platform.
At its peak, Tornado Cash was one of the most popular mixers utilized by malicious players, with the U.S. Department of Justice alleging that the platform handled around $1 billion in criminal proceeds and laundered funds on behalf of North Korean cybercrime groups.
However, malicious players are increasingly using other alternatives like THORChaoin-based THORSwap to move illicit funds.
Following last year’s sanctions on the protocol, its founders, Roman Storm and Roman Semenov, have faced legal actions from the DOJ. A developer for the platform, Alexey Pertsev, was arrested in the Netherlands in August 2022.
Overall volume falls 85%
TRM Labs stated that Tornado Cash’s overall volume has fallen by around 85% post-sanctions.
The firm reported a significant shift in Tornado Cash usage. In the six months leading up to sanctions (February to July 2022), the platform saw a substantial inflow, totaling more than $2.8 billion. However, during the corresponding period one year later (February to July 2023), the volume entering Tornado Cash plummeted to $425 million.
The blockchain analytical firm further reported that the total illicit volume passing through the mixer has decreased by around 77% post-sanctions.
The report continued that while Tornado Cash has continued to operate due to its decentralized nature, the proportion of illicit funds flowing through it has nearly doubled amidst a drastic decline in its overall transaction volumes.
“TRM’s research indicates known illicit use of Tornado Cash has nearly doubled when viewed as a percentage of the service’s volume, those illicit volumes are simply a larger slice of a much smaller pie.”