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Tornado Cash governance token holders will soon regain control of the protocol’s operations thanks to a surprise proposal put forward by the person responsible for the attack. This development allows the community to regain credibility and steer the protocol towards restoring and improving security measures.
On May 26, an offer to regain control of Tornado Cash to the original control holders was successfully accepted. In total, 517,000 token votes were cast in favor of the proposal, with no one opposed. At the time of writing, the execution was 2 hours and 40 minutes away. This resolution sums up quickly the governance takeover, which fortunately did not affect the protocol itself, but led to the theft of some governance tokens.
After successfully arranging a takeover of the protocol control system, the attacker made a malicious proposal that gave them 1.2 million votes. Using this significant voting power, they proceeded to pass additional proposals, eventually seizing control of the previously transferred governance tokens. Their tactics allowed them to manipulate the governance structure, which led to the transfer of power in their favor.
In an unexpected turn of events, just a few hours after the hack, the attacker unexpectedly contacted the Tornado Cash community, presenting a new proposal ostensibly aimed at regaining control of control. This unexpected gesture took many by surprise, sparking curiosity and prompting further exploration of the attacker’s intentions and motives.
According to Martin Li, a data journalist for cryptocurrency analytics website Nansen, the attacker managed to steal a significant amount of 483,000 TORN tokens. Subsequently, they ran a series of swaps, converting most of the stolen tokens into 485 ETH, equivalent to approximately $890,000. This strategic move left them with 39,000 TORN worth about $160,000. To hide the origin of the funds, some of the Ether was cleverly routed through Tornado Cash, adding an extra layer of anonymity to the transactions.
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Tornado Cash, a mixing service based on the Ethereum blockchain, became embroiled in controversy when it was formally sanctioned by the US Treasury Department in August 2022. The sanction was prompted by accusations that the protocol was being used for money laundering purposes.