Recently, blockchain analytics firm Elliptic uncovered that the notorious North Korea-backed hacker group Lazarus has once again turned to the sanctioned crypto mixer Tornado Cash to hide their illicit transactions. This comes after the group had temporarily stopped using Tornado Cash following US government sanctions.
Last year, when the US government imposed sanctions on Lazarus for allegedly aiding criminals in laundering illegally obtained digital assets, the group shifted to alternative options like Sinbad.io and cross-chain bridges. However, with Sinbad.io also facing sanctions for facilitating money laundering activities of North Korean state-sponsored hacking groups, Lazarus had limited choices and returned to Tornado Cash.
One of the main reasons why Lazarus Group opted to go back to Tornado Cash is its decentralized nature, which makes it difficult for authorities to seize or shut down the platform. Unlike centralized mixers, Tornado Cash operates through smart contracts on decentralized blockchains, providing a higher level of anonymity and security for money launderers.
According to Elliptic, Lazarus Group recently moved around $13 million in funds stolen from the HTX Exploit through Tornado Cash in over 40 transactions within the last three days. This marks their first movement since the November 2023 incident, highlighting the group’s ongoing use of the platform despite government sanctions.
Impact on Crypto Community
The resurgence of Lazarus Group’s use of Tornado Cash has raised concerns within the crypto community about the effectiveness of government actions in curbing money laundering activities. With Tornado Cash experiencing a resurgence in total value of assets locked and the price of its native TORN token seeing an increase, it is evident that the platform is still favored by illicit actors.
Rallying Support
Despite facing legal actions from multiple governments, including the US, the developers of Tornado Cash have received support from notable crypto stakeholders like Coinbase. This backing indicates a solidarity within the crypto industry towards projects that may face regulatory challenges and legal scrutiny.
The return of Lazarus Group to Tornado Cash for money laundering purposes showcases the persistent challenges that authorities face in combating illicit activities in the crypto space. It also underscores the need for continued vigilance and innovative solutions to address the evolving tactics of malicious actors in the digital realm.