Tornado Cash (TORN) has seen its market price drop suddenly in the last few hours following news that the DeFi protocol has been compromised. Crypto exploit late yesterday.according to Data from CoinMarketCapAlthough this represents retrace values only, Tornado Cash has fallen 28.25% over the last 24 hours.
Following the news of the TORN attack, the token initially dropped more than 60% before finding support near the $3.86 price range. Since then, TORN has risen somewhat, but not enough to cover previous losses.
TORN Governance System Breach: $2 Million Stolen
Through malicious governance proposals, hackers gained control of Tornado’s cache governance and allocated themselves 1,200,000 votes.
according to Chinese journalist Colin Wuthe hackers used their newly acquired control to move a total of 483,000 TORN, worth about $2 million at the current market price of $4.5, out of the Tornado Cash governance vault.
The hackers then deposited 6,000 TORN on the Bitrue exchange and exchanged the remaining 379,300 TORN for 375 ETH on-chain. As of now, there is no official statement from his Bitrue regarding this development.
Tornado Cash attackers obtained a total of 483,000 TORN from the Tornado Cash governance vault and deposited 6,000 TORN into Bitrue. On the chain he sold 379,300 TORN and exchanged it for 375 ETH (approximately US$680,000). The price is US$1.8. We still have 97,700 TORN left…
— Wu Blockchain (@WuBlockchain) May 21, 2023
Meanwhile, all investors in TORN are required to withdraw all governance-locked funds from project developers. In addition, the Binance exchange has pause TORN has deposits pending resolution of governance issues.
Due to the circumstances surrounding the protocol, #binance temporarily stop $TORN Deposits are not guaranteed until further notice.
— Binance (@binance) May 21, 2023
As of now, it’s unclear how long it will take for the TORN developers to regain control of the governance system and possibly retrieve the stolen loot. Therefore, TORN investors are advised to monitor the latest developments carefully.
and writing time, TORN is trading at $4.50, up 1.5% over the past hour. Looking at the broader performance, DeFi tokens still have a lot to offer, with losses of 30.6% and 48.9% over the last 14 and 30 days respectively.
TORN Trading At $4.5837 | Source: TORNUSDT Chart on Tradingview.com
Tornado Cash Targeted by Crypto Hackers
Interestingly, prior to yesterday’s heist, Tornado Cash played a different role than a target in crypto heists.
The TORN Protocol is a decentralized, non-custodial fund that mixes “potentially identifiable or tainted cryptocurrency funds with other cryptocurrency funds” to cover the original traces of such funds. Works as a virtual currency tumbler.
Thanks to this service, the DeFi project acted as a “money laundering” tool in several cryptocurrency heists. $625M Misused by Ronin in 2022.
After the heist, about 2000 ETH of the loot (worth about $2 million at the time) was transferred to Tornado Cash.In response to this event, TORN blacklisted All US citizens were barred from participating in the protocol by the US Office of Foreign Assets Control (OFAC).
Another popular heist that used Tornado Cash to move some of the stolen funds is a recent one. $200 million stolen from Euler Finance and the $28 million Derbit hack in 2022.
– Featured Image: Charts from Forbes, Tradingview
