The adversary who captured Tornado Cash’s token-based governance mechanism is now returning authority to token holders.
After the attacker of Tornado Cash made an unexpected suggestion, the token holders who control the protocol’s governance are poised to regain power.
On May 26th, with 517,000 token votes in favour and zero against, the move to return power to the original governance holders was approved.
Possible quick resolution to ruthless governance takeover that didn’t harm the system but did result in stolen governance tokens. Data journalist Martin Lee from the cryptocurrency analytics platform Nansen claims that an attacker made off with 483,000 TORN tokens, exchanging most of them for 485 ETH ($890,000), and leaving behind 39,000 TORN ($160,000). Some of the ether was subsequently diverted via Tornado Cash in an effort to hide its true provenance.
By successfully passing a fraudulent proposal containing code granting them 1.2 million votes, the attacker gained control of the protocol’s governance mechanism. They then utilized these votes to approve other proposals, thereby vesting power over the governance tokens.
Tornado Cash is an Ethereum-based mixing service. In August of 2022, sanctions were placed on the protocol by the United States Treasury because of claims of money laundering. One of the protocol’s creators, Alexey Pertsev, is now being held in the Netherlands for trial on charges of money laundering.
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