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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 and view the source code, design documents, or content of the product. The open source model is a decentrali ...
,
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 rig ...
, fully
decentralized Decentralization or decentralisation is the process by which the activities of an organization, particularly those related to planning and decision-making, are distributed or delegated away from a central, authoritative location or group and gi ...
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 pooling ...
that runs on
Ethereum Virtual Machine Ethereum is a decentralized blockchain with smart contract functionality. Ether (abbreviation: ETH) is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization. It is open-sourc ...
-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. In August 2022, 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. It is one of 15 current U.S. government departments. The department oversees the Bureau of Engraving and ...
blacklisted the protocol, making it illegal for US citizens, residents and companies to use it. The project's web domain and
GitHub GitHub () is a Proprietary software, proprietary developer platform that allows developers to create, store, manage, and share their code. It uses Git to provide distributed version control and GitHub itself provides access control, bug trackin ...
accounts were also shut down, and one of the developers of the software was arrested. On November 26, 2024 a US Federal Appeals court overturned an earlier ruling stating that the law could not sanction a protocol. The project is governed through a
decentralized autonomous organization A decentralized autonomous organization (DAO), sometimes called a decentralized autonomous corporation (DAC), is an organization managed in whole or in part by decentralized computer programs, with voting and finances handled through a decent ...
(DAO) and uses the $TORN token as a voting system for protocol updates.


Functionality

Tornado Cash uses multiple
smart contract A smart contract is a computer program or a Transaction Protocol Data Unit, transaction protocol that is intended to automatically execute, control or document events and actions according to the terms of a contract or an agreement. The objective ...
s that accept different quantities of ETH and ERC-20 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 (also known as a ZK proof or ZKP) is a protocol in which one party (the prover) can convince another party (the verifier) that some given statement is true, without conveying to the verifier any information ...
s (in particular zk-SNARKs) are used to increase privacy, as there is no way to link a withdrawal to its deposit.


History

Tornado Cash was created in 2019, and was alleged by 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. It is one of 15 current U.S. government departments. The department oversees the Bureau of Engraving and ...
to have been "used to launder more than $96 million of malicious cyber actors’ funds derived from the June 24, 2022 Harmony Bridge Heist". 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 United States Department of the Treasury, United States Treasury Department. It administers and enforces economic and trade economic sanctions, ...
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. It is one of 15 current U.S. government departments. The department oversees the Bureau of Engraving and ...
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 The Lazarus Group (also known as Guardians of Peace or Whois Team ) is a hacker group made up of an unknown number of individuals, alleged to be run by the government of North Korea. While not much is known about the group, researchers have at ...
, 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 borders China and Russia to the north at the Yalu River, Yalu (Amnok) an ...
. The same day, the domain used by the project was taken down, and
GitHub GitHub () is a Proprietary software, proprietary developer platform that allows developers to create, store, manage, and share their code. It uses Git to provide distributed version control and GitHub itself provides access control, bug trackin ...
removed the Tornado Cash repository and suspended the developers' accounts.
Circle A circle is a shape consisting of all point (geometry), points in a plane (mathematics), plane that are at a given distance from a given point, the Centre (geometry), centre. The distance between any point of the circle and the centre is cal ...
, the company behind
USD Coin USDC is a cryptocurrency stablecoin which is issued by Circle (company), Circle. It is Fixed exchange rate system, pegged to the United States dollar, and is distinct from a central bank digital currency (CBDC). Usage USDC operates as an Eth ...
, 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 ( , ; ; ) is the capital of the Netherlands, capital and Municipalities of the Netherlands, largest city of the Kingdom of the Netherlands. It has a population of 933,680 in June 2024 within the city proper, 1,457,018 in the City Re ...
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". The
Electronic Frontier Foundation The Electronic Frontier Foundation (EFF) is an American international non-profit digital rights group based in San Francisco, California. It was founded in 1990 to promote Internet civil liberties. It provides funds for legal defense in court, ...
on April 11, 2023, announced that it was opposed to the legal actions stating: "governmental actions targeting the publication of code based upon its topic necessarily target speech" as well as raising concerns about financial privacy. On May 21, 2023, a hacker used a malicious proposal to gain full control of Tornado Cash's DAO. The hacker put forth a proposal for the DAO to vote on with hidden code that would issue the fraudulent voting tokens to them. The vote was passed, giving the hacker enough voting tokens to control any future proposals. On May 26th, the hacker effectively relinquished control, but had converted a portion of the stolen governance tokens to
Ether In organic chemistry, ethers are a class of compounds that contain an ether group, a single oxygen atom bonded to two separate carbon atoms, each part of an organyl group (e.g., alkyl or aryl). They have the general formula , where R and R� ...
valued at around $900,000, and laundered them through the service. On August 23, 2023, two more Tornado developers, Roman Storm and Roman Semenov, were charged with assisting in money laundering in the amount of $1 billion. Roman Storm was arrested in Washington State. On May 14, 2024, Alexey Pertsev was sentenced by a court in the
Netherlands , Terminology of the Low Countries, informally Holland, is a country in Northwestern Europe, with Caribbean Netherlands, overseas territories in the Caribbean. It is the largest of the four constituent countries of the Kingdom of the Nether ...
to 5 years and 4 months in prison for his role in Tornado Cash development. A trial of Pertsev was also pending as of that date in the
United States District Court for the Southern District of New York The United States District Court for the Southern District of New York (in case citations, S.D.N.Y.) is a federal trial court whose geographic jurisdiction encompasses eight counties of the State of New York. Two of these are in New York Ci ...
. On November 26, 2024, the
United States Court of Appeals for the Fifth Circuit The United States Court of Appeals for the Fifth Circuit (in case citations, 5th Cir.) is one of the 13 United States courts of appeals. It has appellate jurisdiction over the U.S. district courts in the following federal judicial districts: ...
ruled that the immutable smart contracts used by Tornado Cash do not qualify as "property" under federal law, and that the
Office of Foreign Assets Control The Office of Foreign Assets Control (OFAC) is a financial intelligence and enforcement agency of the United States Department of the Treasury, United States Treasury Department. It administers and enforces economic and trade economic sanctions, ...
lacked authority to sanction Tornado Cash software directly, "as opposed to the rogue persons and entities who abuse it". On March 21, 2025, sanctions were dropped by the U.S. Department of the Treasury.


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: Aircraft *Medium bomber, a class of warplane * Tecma Medium, a French hang glider design Arts, entertainment, and media Films * ''The Medium'' (1921 film), a German silent film * ''The Medium'' (1951 film), a film vers ...

Understanding Zero-Knowledge Proofs Through the Source Code of Tornado Cash
Cryptocurrency tumblers Decentralized autonomous organizations Specially Designated Nationals and Blocked Persons List Products introduced in 2019