Wallet of banned Tornado Cash mixer comes under the control of the DAO

All five signatories waived their right to confirm transactions

16.08.2022 - 12:00

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3 min

What’s new? On August 14, a blockchain developer under the pseudonym banteg reported on his Twitter account that all five signatories of the Tornado Cash Community Fund multisignature wallet withdrew from management and transferred their rights to a decentralized autonomous organization (DAO). This came amid the imposition of sanctions against the Tornado Cash mixer by US authorities on August 8.

tornado cash multisig disbanded, the last remaining owner is the daohttps://t.co/S6cBnhflSz— banteg (@bantg) August 14, 2022

What is known about the wallet? In 2021, the Tornado Cash community created a special fund aimed at supporting various projects to improve the protocol. Five of its members had the right to sign transactions. In this, the transaction itself could only be conducted with the consent of at least four voting members.

What events preceded it? After sanctions were imposed, Tornado Cash faced a sharp outflow of users and a decrease in deposits. MakerDAO co-founder Rune Christensen proposed excluding USDC worth $3,5 billion from the reserves of the DAI stablecoin to reduce risk as the USDC issuer froze more than 75 000 coins associated with Tornado Cash’s sanctioned addresses. The dYdX exchange, the Oasis.app DeFi platform and the Aave DeFi protocol have begun blocking users whose addresses are associated with the mixer.

Lawyers of Coin Center, a non-profit crypto policy think tank, are preparing to challenge the US authorities’ decision to ban Tornado Cash in court. Uniswap protocol founder Adam Hayden, developers of the anonymous cryptocurrency Zcash from ECC, and Stefan George, co-founder of Gnosis Chain, an Ethereum sidechain also opposed it.

The mixer’s creator himself, Alexey Pertsev, was detained by Dutch authorities on August 12 on suspicion of involvement in money laundering. This information was confirmed by his wife Ksenia Malik to The Block.

For more details on the experts’ opinions on the dangers of interacting with sanctioned services such as Tornado Cash, see GetBlock Magazine’s article.

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