Blockchain analytics firm Elliptic has revealed that the North Korean-backed hacker group #Lazarus uses #TornadoCash to hide its transactions.

Last year, the group stopped using Tornado Cash after the US government imposed sanctions. Tornado Cash is accused of assisting criminals in laundering money from illegally obtained digital assets.

Following the sanctions, Tornado Cash experienced an 85% decline in total volume. Hackers started using alternatives like Sinbad.io and cross-chain bridges.

Why does Lazarus use Tornado Cash

Recently, US government sanctions against Sinbad.io have limited options for Lazarus.

Therefore, the team returned to Tornado Cash. The service still operates despite US sanctions thanks to its decentralized nature.

Elliptic revealed that Lazarus recently transferred approximately $13 million stolen from Cooperative Exploit. This amount was transferred through Tornado Cash by 40 transactions in 3 days. The move marks the first move since the incident in November 2023.

New red alert for the whole industry?

The return of Tornado Cash reflects the seemingly ineffective control of government operations.

Elliptic explains that Tornado Cash cannot be confiscated and shut down like centralized coin mixing services. It works through smart contracts on decentralized blockchains.

Elliptic co-founder Tom Robinson added:

“The takedown of centralized coin mixing services by law enforcement may be pushing crypto laundering back to decentralized options.”

Data from DeFillama also hinted at a platform recovery. The total value of Tornado Cash's locked assets reached 565 million USD. This is the highest level since the US government imposed sanctions in 2022.

This trend is also reflected in the TORN token. It is currently trading at ~2 USD. TORN has increased 13% in the past day.

Meanwhile, the crypto community has thrown its support behind the project developers after multiple governments including the United States targeted them with legal action. Prominent crypto stakeholders such as Coinbase have supported the legal defense of the developers.