Tornado Cash (also stylized as TornadoCash) is an

open source Open source is source code that is made freely available for possible modification and redistribution. Products include permission to use the source code, design documents, or content of the product. The open-source model is a decentralized sof ...

non-custodial Child custody is a legal term regarding '' guardianship'' which is used to describe the legal and practical relationship between a parent or guardian and a child in that person's care. Child custody consists of ''legal custody'', which is the righ ...

, fully

decentralized Decentralization or decentralisation is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group. Conce ...

cryptocurrency tumbler A cryptocurrency tumbler or cryptocurrency mixing service is a service that mixes potentially identifiable or "tainted" cryptocurrency funds with others, so as to obscure the trail back to the fund's original source. This is usually done by poolin ...

that runs on

Ethereum Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (Abbreviation: ETH; sign: Ξ) is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capita ...

Virtual Machine In computing, a virtual machine (VM) is the virtualization/emulation of a computer system. Virtual machines are based on computer architectures and provide functionality of a physical computer. Their implementations may involve specialized hardw ...

-compatible networks. It offers a service that mixes potentially identifiable or "tainted" cryptocurrency funds with others, so as to obscure the trail back to the fund's original source. This is a privacy tool used in EVM networks where all transactions are public by default. The project is governed through a decentralized autonomous organization (DAO) and using the $TORN token as a voting system for protocol updates. On 18 August 2022, Tornado Cash was present on the

(ETH),

Binance Smart Chain Binance is a cryptocurrency exchange which is the largest exchange in the world in terms of daily trading volume of cryptocurrencies. It was founded in 2017 and is registered in the Cayman Islands. Binance was founded by Changpeng Zhao, a deve ...

, Polygon, and Optimism networks, with Ethereum being the most-used one, having had over

US$ The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...

7.6 billion in ETH go through the mixer.

Functionality

Tornado Cash uses multiple smart contracts that accept different quantities of ETH and

ERC-20 Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (Abbreviation: ETH; sign: Ξ) is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capita ...

deposits. These deposits can later be withdrawn to a different address by providing a cryptographic proof, hence breaking the link in the chain between the sender and the recipient.

Zero-knowledge proof In cryptography, a zero-knowledge proof or zero-knowledge protocol is a method by which one party (the prover) can prove to another party (the verifier) that a given statement is true while the prover avoids conveying any additional information a ...

s (in particular

zk-SNARK Non-interactive zero-knowledge proofs are zero-knowledge proofs where information between a prover and a verifier can be authenticated by the prover, without revealing any of the specific information beyond the validity of the transaction itself. T ...

s) are used to ensure privacy, and there is no way to link a withdrawal to its deposit, which ensures asset confidentiality.

OFAC blacklisting

On 8 August 2022, the

Office of Foreign Assets Control The Office of Foreign Assets Control (OFAC) is a financial intelligence and enforcement agency of the U.S. Treasury Department. It administers and enforces economic and trade sanctions in support of U.S. national security and foreign policy ob ...

of the

U.S. Department of the Treasury The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and t ...

blacklisted Tornado Cash, making it illegal for United States citizens, residents, and companies to receive or send money through the service. The Treasury Department accused it of laundering more than $7 billion in virtual currencies, including $455 million believed to have been stolen in 2022 by the

Lazarus Group Lazarus Group (also known by other monikers such as Guardians of Peace or Whois Team ) is a cybercrime group made up of an unknown number of individuals run by the government of North Korea. While not much is known about the Lazarus Group, resea ...

, a hacking group associated with the government of

North Korea North Korea, officially the Democratic People's Republic of Korea (DPRK), is a country in East Asia. It constitutes the northern half of the Korea, Korean Peninsula and shares borders with China and Russia to the north, at the Yalu River, Y ...

Reactions

The same day, the domain used by the project was taken down, and

GitHub GitHub, Inc. () is an Internet hosting service for software development and version control using Git. It provides the distributed version control of Git plus access control, bug tracking, software feature requests, task management, continuous ...

removed the Tornado Cash repository and suspended the developers' accounts. Circle, the company behind

USD Coin USD Coin (USDC) is a digital stablecoin pegged to the United States dollar. USD Coin is managed by a consortium called Centre, which was founded by Circle and includes members from the cryptocurrency exchange Coinbase and Bitcoin mining company ...

, froze about $75,000 in USDC from Ethereum addresses belonging to the mixer. On 10 August 2022, Tornado Cash developer Alexey Pertsev was arrested in

Amsterdam Amsterdam ( , , , lit. ''The Dam on the River Amstel'') is the Capital of the Netherlands, capital and Municipalities of the Netherlands, most populous city of the Netherlands, with The Hague being the seat of government. It has a population ...

on the suspicion of "involvement in concealing criminal financial flows and facilitating money laundering through the mixing of cryptocurrencies through the decentralised Ethereum mixing service Tornado Cash."

References

External links

* {{Webarchive, url=https://web.archive.org/web/20220808144431/https://tornado.cash, title=Official website of Tornado Cash, date=8 August 2022
''Tornado Cash Blog''
at

Medium Medium may refer to: Science and technology Aviation *Medium bomber, a class of war plane *Tecma Medium, a French hang glider design Communication * Media (communication), tools used to store and deliver information or data * Medium of ...

Understanding Zero-Knowledge Proofs Through the Source Code of Tornado Cash
Cryptocurrency tumblers Decentralized autonomous organizations

Functionality

OFAC blacklisting

Reactions

See also

References

External links