DeFi

Tornado Cash Was Involved In The Hack Of $500,000 Stolen From DAO Maker Last Year

According to security companies PeckShield and CertiK, a DAO Maker miner’s Ethereum address last year laundered 500,000 DAI stablecoins via Tornado Cash.

Tornado Cash Was Involved In The Hack Of $500,000 Stolen From DAO Maker Last Year 2

DAO Maker, a website for crowdsourcing donations that had a hack in August 2021, should not be confused with the Maker DAO stablecoin project. A hacker was able to steal more than $7 million in stablecoins as a result of a flaw in the DAO Maker’s smart contract. These monies were subsequently dispersed across many addresses under the hacker’s control.

One year after the incident, one of the addresses, which Etherscan identified as the DAO Maker’s exploiter, transferred DAI stablecoins valued at $500,000 using Tornado Cash. Tornado Cash helps hackers to hide transactional activity, therefore they frequently utilize it to transfer stolen assets.

Since being approved by the Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department, Tornado Cash has gained attention. Due to the app’s potential for money laundering after the sanctions, all persons and organizations having a US address are not permitted to use it.

Tornado Cash has however continued to be used by hackers of decentralized finance protocols, as witnessed today and in other recent occurrences, even after the penalties were declared.

On August 19, PeckShield discovered that an address linked to a December 2021 Grim Finance vulnerability had transferred about $3.3 million into Tornado Cash. Then, on September 6, the MonoX Finance scammer used Tornado Cash to launder $2.1 million.

Tornado was created with the intention of protecting the privacy of Ethereum users, but it also ended up being used by hackers to launder money earned illegally. Since its founding in 2019, Tornado has reportedly been utilized by criminal actors, including North Korea’s Lazarus gang, to transact more than $7 billion in cryptocurrency.

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Harold

CoinCu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.