Introduction
The hacker behind the recent Infini protocol exploit reportedly laundered over 3,000 ETH (roughly $10 million) through Tornado Cash — reigniting debates over the use of privacy mixers in the crypto ecosystem.
What Happened?
Following the July 14 exploit of Infini, the attacker swiftly funneled stolen funds through Tornado Cash. This decentralized protocol scrambles transactions to make them untraceable, drawing both praise and criticism from the crypto community.
Reactions and Concerns
Law enforcement agencies condemned the move, citing Tornado Cash’s previous association with North Korean hackers. Regulators warned exchanges to scrutinize inflows more closely to avoid facilitating money laundering.
Privacy advocates defended Tornado Cash as an essential tool for financial privacy, especially in the face of increasing surveillance.
Market and Legal Impact
The Ethereum price remained largely unaffected. However, regulatory bodies reiterated their warnings about interacting with sanctioned protocols, which could lead to hefty fines for exchanges and custodians.
Future Outlook
The incident renews calls for a balanced approach to privacy — ensuring anonymity for legitimate users while preventing abuse by bad actors. Policymakers are likely to revisit regulations targeting privacy mixers.
