960x0 1 460x303 Tornado Cash (TORN) Suffers 27% Drop As Hackers Strike

Tornado Cash (TORN) Suffers 27% Drop As Hackers Strike

Tornado Cash (TORN) has experienced a sudden fall in its market price over the last few hours following news of the DeFi protocol suffering a crypto exploit late yesterday. According to data from CoinMarketCap, Tornado Cash is down 28.25% in the last 24 hours, albeit this only represents a retraced value.

Following news of TORN’s attack, the token initially dropped by over 60% before finding support around the price region of $3.86. Since then, TORN has made some upward movement, however not sufficient to cover up the earlier loss.

TORN Governance System Breached: $2M Stolen

Through a malicious governance proposal, a hacker gained control of Tornado’s Cash Governance, allocating 1,200,000 votes to themselves.

According to Chinese reporter Colin Wu, the hacker used their newly gained control to move a total of 483,000 TORN out of the Tornado Cash governance vault worth about $2 million at the present market price of $4.5.

The hacker then proceeded to deposit 6,000 TORN on the Bitrue exchange and swapped the remaining 379,300 TORN on-chain for 375ETH. Currently, there has been no official statement from Bitrue on this development.

The Tornado Cash attacker obtained a total of 483,000 TORN from the Tornado Cash governance vault, and has deposited 6,000 TORN into Bitrue; sold 379,300 TORN on the chain and exchanged it for 375 ETH (about 680,000 U.S. dollars). The price is US$1.8; there are still 97,700 TORNs…

— Wu Blockchain (@WuBlockchain) May 21, 2023

Meanwhile, all TORN investors have been urged to withdraw all their governance-locked funds from the project developers. In addition, the Binance exchange has suspended TORN deposits pending a solution to the governance issue.

Due to circumstances surrounding the protocol, #Binance will temporarily pause $TORN deposits until further notice.

— Binance (@binance) May 21, 2023

 

For now, it remains unknown how long it may take for TORN developers to regain control of the governance system and perhaps recover the stolen loot. Thus, TORN investors are advised to keep a close watch for any latest development. 

At the time of writing, TORN is trading at $4.5, with a 1.5% gain in the last hour. Looking at its broader performance, the DeFi token leaves much to desire, with 30.6% and 48.9% losses in the last 14 and 30 days, respectively.

Tornado Cash Becomes Target Of Crypto Hacker

Interestingly, prior to yesterday’s heist, Tornado Cash had played a different role in crypto heists rather than being the target. 

The TORN protocol operates as a decentralized, non-custodial cryptocurrency tumbler that mixes “potentially identifiable or tainted cryptocurrency funds with others” so as to cover the original trail of such funds. 

Due to this service, the DeFi project served as a “money laundering” tool in a couple of crypto heists, most notably the $625 million Ronin exploit in 2022.

About 2000 ETH – valued at nearly $2 million then- of the loot were moved to Tornado Cash following the heist. Following this event, TORN was blacklisted by the U.S. Office of Foreign Assets Control (OFAC), banning all U.S. citizens from engaging with the protocol.

Other popular heists involving the use of Tornado Cash in moving part of the stolen funds include the recent $200 million theft from Euler Finance and the $28 million Derbit hack in 2022. 

 

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