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North Korea-Backed Hacker Group Lazarus Returns to Tornado Cash Despite Sanctions
Elliptic, a blockchain analytics firm, has disclosed that the North Korea-backed hacker group Lazarus has resumed using the sanctioned crypto mixer Tornado Cash to conceal its transactions. Last year, following US government sanctions imposed due to allegations of aiding criminals in laundering illegally obtained digital assets, the group stopped using the crypto mixer. This led to an 85% decrease in overall volume on Tornado Cash as hackers shifted to alternatives like Sinbad.io and cross-chain bridges.
Reasons Behind Lazarus Group’s Return to Tornado Cash
Despite the sanctions on Sinbad.io for its involvement in money laundering activities of North Korean state-sponsored hacking groups, options for Lazarus have become limited. Consequently, the group has turned back to Tornado Cash, which continues to operate owing to its decentralized nature. Elliptic revealed that the group recently moved approximately $13 million in funds stolen from the HTX Exploit through Tornado Cash in over 40 transactions within the last three days, marking their first movement since the November 2023 incident.
Implications for the Industry
The Lazarus Group’s resurgence on Tornado Cash highlights the government’s challenge in effectively curbing the operations of the mixer, as stated by Elliptic. The firm explained that Tornado Cash cannot be seized or shut down like centralized mixers because it functions through smart contracts on decentralized blockchains. Co-founder of Elliptic, Tom Robinson, noted, “The takedowns of centralized mixers by law enforcement agencies are perhaps pushing crypto laundering back towards decentralized alternatives.”
Data from DeFillama also indicates a revival of the platform, with the total value of assets locked reaching $565 million, its highest level since the US government sanctions in 2022. The native TORN token of the protocol was trading at approximately $2 at press time, reflecting a 13% increase in the past day, based on CryptoSlate data.
Amid legal actions taken by various governments, including the US, against the project’s developers, the crypto community has shown support for them. Key stakeholders in the crypto industry such as Coinbase have backed the developers in their legal defense.
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