In the midst of the Tornado Cash crackdown, hackers are using Bitcoin mixers to conceal stolen funds.
Criminals operating in the bitcoin industry are adjusting their strategies to evade the more stringent regulations. Hackers’ strategies for laundering stolen cash have evolved significantly, according to new research from blockchain security company CertiK.
After the once-prominent Tornado Cash mixer came under heightened attention in 2023, hackers sought alternate avenues to transport their ill-gotten wealth, and more than $300 million in stolen earnings from 50 of the greatest attacks found their way into Bitcoin.
Based on their research, CertiK has determined that Bitcoin mixers are now the go-to method for cryptocurrency laundering. This change is a result of regulatory steps taken against Tornado Cash, a popular mixing service that helps to mask the identity of crypto transactions.
The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) levied sanctions on Tornado Cash in 2022, stating that more than $7 billion worth of cryptocurrency had been laundered since 2019.
Essential technologies that increase the secrecy of bitcoin transactions are crypto mixers, also known as tumblers. Protocols like this combine potentially traceable cash with a large pool of other funds, making it so that transactions between wallet addresses are practically anonymous. Although these technologies are designed to help those who are concerned about their privacy, bad actors have discovered methods to take advantage of them.
Bitcoin’s decentralization and privacy characteristics are two sides of the same coin, according to CertiK’s Joe Green, who heads up their rapid reaction team:
“Both users concerned about their privacy and those out to cause harm can find a privacy mixer in the Bitcoin ecosystem.”
Decentralized systems inherently face this difficulty, as Green admitted. As a replacement for Tornado Cash in 2023, Bitcoin mixers like Sinbad—which US authorities also took down—became well-liked. Bitcoin mixers use a different tack than Tornado Cash, which mostly makes it harder to trace who sent and who received the money.
They make it far more difficult to track the movement of money as users may deposit Bitcoin and split it across many wallets in different percentages.
According to CertiK’s research, high-value events (involving $50 million or more) are increasingly turning to crypto-based laundering solutions, even while Tornado Cash is still the “go-to” mixer for smaller-scale cybercrimes. This change shows how the bitcoin industry is dealing with new and different problems.
The demand for adaptable responses to blockchain-based financial crime is growing in response to the ever-changing nature of crypto laundering strategies.
Green underlined the need for exchanging information with appropriate parties, such as crypto exchanges, and the need for thorough tracking of “dirty” funds.
Also Read: Philippines SEC Chair Provides Clarification On Possible Ban On Binance
Wallets