Tornado Cash’s Open Source Mechanism is Easy to Copy but Risky to Run

Open source mechanism of Tornado Cash needs strength to fight against the US government

The cryptocurrency market is embracing the open source mechanism of Tornado Cash after the sanction of mixing service from the US Treasury Department. Tornado Cash or TORN is a popular cryptocurrency mixer on the Ethereum blockchain. But recently, the US Treasury Department has banned laundering over US$7 billion in cryptocurrency since 2019. It is commonly used by cybercriminals for re-routing stolen funds. The piece of good news is that the management can still run the open source mechanism of Tornado Cash yet it is too risky to run in the current scenario.

Tornado Cash is known as the cryptocurrency mixer offering anonymous crypto transactions and making a tough road to track crypto wallets efficiently. It receives millions of transactions that are mixed before transferring to individual wallets of crypto investors. It is highly difficult for crypto investors to track and retrieve the final address of the crypto wallets. A cryptocurrency is divided into thousands of minute particles and distributed across thousands of crypto wallets.

The US Government found out that Tornado Cash is being used by a Lazarus group to steal more than US$455 million. It has also helped to loot over US$96 million from crypto wallets in the Harmony Bridge heist as well as over US$7.8 million in the Normad heist. It has been observed that Tornado Cash has successfully failed to impose strict rules and regulations to prevent cyber criminals from laundering money through cryptocurrency. The US Treasury Department has put a hold on the money laundering scheme by taking aggressive actions against the criminals. Crypto investors and analysts have accepted that a cryptocurrency mixer ban can be the right step toward malicious action.

There are some criticisms against the US Treasury Department because the ban has created a drastic impact on crypto investors who use Tornado Cash for their crypto wallets. The open-source mechanism vanished from GitHub because of suspension. It uses a decentralized protocol where the smart contracts are implemented within the Ethereum blockchain. This has created controversies in the cryptocurrency market claiming that the government is overstepping into the decentralized system. Thus, the open source mechanism is easy for Tornado Cash to copy and run but it is too risky to fight against the US government. The cryptocurrency market is experiencing a lot of government impositions, rules, and regulations across the world in many countries despite being a decentralized system without any central authority.