Tuesday, September 27, 2022
HomeDeFiAre Crypto Mixers helping hackers? Check it out.

Are Crypto Mixers helping hackers? Check it out.

In December, hackers exploited the Tornado Cash tool to launder USD 196 million in stolen cryptocurrency from the Bitmart exchange.

In recent weeks, a series of high-profile crypto thefts have revealed the tools used by hackers to hide their footprints. One of their favourites is the Tornado Cash DeFi mixing service. It leaves a clean trace for crypto transactions, whether illegal or not. According to reports, despite the fact that these mixing services have not been termed unlawful by worldwide regulators, their rising popularity is fueling money-laundering fears. After centralised exchanges demanded KYC (know-your-customer) data from their customers, crypto mixers have grown in popularity. The KYC data was demanded by exchanges under mandate from governments.

Tornado Cash, as a crypto mixer, uses zero-knowledge proofs to effectively dissolve the connection between both the source and destination. As per United Nations (UN) data, each year, around 2-5 percent of the $2 trillion in global growth is laundered in national currencies. Also, according to a Chainalysis research, cryptocurrencies are used to launder roughly $8.6 billion per year which forms a miniscule proportion of the $40-$100 billion in cash equivalents. It suggests that cash is still a king in the Money Laundering.

Money laundering is one of the most often claimed accusations about cryptocurrency by governments and authorities. Although paper cash is still the preferred medium for money laundering, cryptocurrencies have developed a poor image among officials in recent years. Platforms like Tornado Cash are adding gasoline to the fire in the direction. In December, hackers exploited the Tornado Cash tool to launder USD 196 million in stolen cryptocurrency from the Bitmart exchange.

 

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