Tornado Cash

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<p class="is-style-lead">In a shocking turn of events, an attacker who recently hijacked the governance of Tornado Cash has <a href="https://forums.tornadocash.community/t/attacker-has-a-new-proposal-to-potentially-restore-the-state-of-governance/183/4" target="_blank" rel="noopener">proposed </a>to undo their hack, sparking hope and skepticism within the community.</p>



<p>The attacker&#8217;s initial malicious proposal on May 21 granted them complete control over Tornado Cash&#8217;s decentralized crypto mixer, raising concerns about potential massive losses. However, a community member, known as Tornadosaurus-Hex or Mr. Tornadosaurus Hex, took swift action to mitigate the damage by proposing the withdrawal of all locked funds in governance.</p>



<figure class="wp-block-image size-large"><img decoding="async" width="1024" height="735" src="https://crypto.news/app/uploads/2023/05/467257e8-221e-4a56-b955-27a1491b66f5-1024x735.webp" alt="Tornado Cash attacker proposes to return control - 1" class="wp-image-14159187"><figcaption class="wp-element-caption">Community member&#8217;s proposal to reclaim control from Tornado Cash attacker | Source: Tornado Cash forums</figcaption></figure>



<p>Uncertainty loomed over the effectiveness of this new proposal, given the attacker&#8217;s firm grip on Tornado Cash&#8217;s governance. But to everyone&#8217;s surprise, the attacker reached out to the Tornado Cash community hours later with a <a href="https://forums.tornadocash.community/t/attacker-has-a-new-proposal-to-potentially-restore-the-state-of-governance/183/4" target="_blank" rel="noopener">new proposal</a>, suggesting their intention to relinquish control.</p>



<p>Hex informed the community about this development, stating,</p>



<blockquote class="wp-block-quote">
<p>&#8220;The attacker posted a new proposal to restore the state of governance. I think there is a good chance he will execute it.&#8221;</p>
</blockquote>



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<h2 class="wp-block-heading" id="strong-crypto-community-split-over-attacker-8217-s-proposal-strong"><strong>Crypto community split over attacker&#8217;s proposal</strong></h2>



<p>While some community members expressed optimism regarding the attacker&#8217;s apparent change of heart, others speculated that it might be an attempt to boost the price of the TORN token before making a swift exit</p>



<p>The original attack had caused a significant drop in TORN&#8217;s value, plummeting by 41% from $6.08 to $3.57 within hours. As of May 22, the price had partially recovered to $4.52. Any recovery in the token&#8217;s value could potentially increase the worth of any stolen cryptocurrency.</p>



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="1402" height="792" src="https://crypto.news/app/uploads/2023/05/TORN_7D_graph_coinmarketcap.jpeg" alt="TORN/USD 24hr price chart | Source: CoinMarketCap" class="wp-image-14159289"/><figcaption class="wp-element-caption">TORN/USD 24hr price chart | Source: <a href="https://coinmarketcap.com/currencies/torn/" target="_blank" rel="noopener">CoinMarketCap</a></figcaption></figure>



<p>If the recovery proposal does not aim to raise prices, it could be interpreted as either a trolling attempt or a costly but not catastrophic lesson, according to <a href="https://twitter.com/0xdface/status/1660395508521738240" target="_blank" rel="noopener">0xdeadf4ce</a>.</p>



<p>The outcome of the recovery proposal will only become clear on May 26, adding further suspense to the situation.</p>



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="US Sanctions Tornado Cash, But the Blockchain is Ungovernable" width="1020" height="574" src="https://www.youtube.com/embed/x7gaqhF-wrQ?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>
</div></figure>



<h2 class="wp-block-heading" id="strong-2-1m-worth-of-torn-tokens-stolen-strong"><strong>$2.1m worth of TORN tokens stolen</strong></h2>



<p>On May 20, the attacker gained control over Tornado Cash by creating and voting for a proposal that granted them sole governance authority. This allowed them to withdraw all locked votes and tokens from Tornado Cash&#8217;s governance contract.</p>



<p>After gaining control of Tornado Cash&#8217;s contract, the attacker wasted no time depleting the governance contract. They successfully drained 473,000 TORN tokens, the native currency of the mixer, which amounted to a staggering value of over $2.1 million.</p>



<p>A tweet from Web3 media group @WhaleCoinTalk substantiated this information, disclosing that the perpetrator proceeded to sell the assets on-chain and reinvest the resulting profits into Tornado.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr"><a href="https://twitter.com/hashtag/TornadoCash?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#TornadoCash</a> hit by governance attack!⚠️<br><br>Attacker grants themselves 1.2M votes using a malicious proposal, enabling them to manipulate vote logic and accumulate fake votes.<br><br>The attacker also extracted 473K <a href="https://twitter.com/search?q=%24TORN&amp;src=ctag&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">$TORN</a> from the governance contract, selling it on-chain.👀<a href="https://twitter.com/hashtag/CryptoNews?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#CryptoNews</a></p>&mdash; Whale Coin Talk (@WhaleCoinTalk) <a href="https://twitter.com/WhaleCoinTalk/status/1660150452749754368?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">May 21, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>Despite being subjected to <a href="https://crypto.news/u-s-treasury-department-revises-sanctions-on-tornado-cash/">sanctions imposed</a> by the US Treasury in August 2022, Tornado Cash continues to operate unabated. The decentralized coin mixer exclusively handles cryptocurrency transactions, and the lack of centralized operations has rendered the US government unable or uninterested in directly enforcing sanctions against the project.</p>



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Tornado Cash attacker proposes to return control

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