Could it get any worse for the already struggling crypto mixer Tornado Cash? Not only on the regulatory side, but also measurements on the chain have now revealed a frustrating story. From monthly users to weekly deposits and withdrawals and more…
The eye of this hurricane is dying
Crypto Mixer Tornado Cash has seen a significant drop in activity following sanctions from the US Treasury. Starting with the unique users of Dune Analytics, the drop has been significant.
Data from Dune reveals a significant drop in the number of unique users per week since the sanctions were announced in August 2022. In fact, in September, the number of unique users fell below 100.
This is actually a steep decline to say the least. From an all-time high in terms of unique users to a potentially permanent decline.
Overall, the number of monthly users is down more than 50% from over 2,600 in July to less than 1,000 the following month. This proved that the number of users decreased by >50%, as shown in the graph above.
Moreover, when weekly deposits and withdrawals were looked at, a similar picture emerged. In fact, in the last week of September, weekly deposits and withdrawals totaled $3.6 million and $5 million, respectively.
These numbers essentially went from $190 million+ in the second quarter (for both tranches) to the above numbers.
why always me
Well, that is exactly it. Tornado Cash appears to have become the main destination for cybercriminals looking to launder their illicit money. First of all, the platform was used by the state-sponsored hacker group Lazarus in North Korea. At the time, the Treasury said Tornado Cash had been used to launder more than $7 billion since its inception.
That’s not all either, the TransitSwap hacker also uses Tornado Cash to transfer some of the stolen money.
The TransitSwap hacker transferred some of the stolen funds to Tornado Cash and said it only exploited eth and bsc. If I attack other chains, I can get $100 million. I should get a higher reward than I am getting now. It’s hard not to suspect that this is your official back door. https://t.co/GNgDyG1FJD https://t.co/LxyUQOGXQg
– Wu Blockchain October 3, 2022
The cryptocurrency community as a whole has suffered serious repercussions after this latest episode of Tornado Cash. For example, according to Messari, one USDC instrument took massive blow Immediately after the failure of the Tornado Cash penalties.
Finally, the price of the TORN token has fallen by more than 20% since then. At the time of writing, it is consolidating around the $6.26 mark on the price charts.
Ergo, the question – are there better days to come?