Ethereum’s cofounder Vitalik Buterin admits to using Tornado Cash, an Ethereum coin mixing tool, to donate to Ukraine. This, he admitted barely a day after the U.S. Treasury Department blacklisted the app that lets individuals use the Ethereum network to send and receive money privately.
Vitalik Buterin admits to using Tornado Cash
In a reply to a Twitter post of Jeff Coleman (@technocrypto) asking whether there are any documented examples of Tornado Cash having been used for donation, Buterin replied:
I'll out myself as someone who has used TC to donate to this exact cause.
— vitalik.eth (@VitalikButerin) August 9, 2022
Tornado Cash enables to combine cryptocurrency deposits of various people which in turn covers their transaction details and hides them from the public.
Treasury Department’s announcement
On Monday, in its announcement, the Treasury Department of the United States cited that crypto thieves are using Tornado Cash to launder money.
It said that Tornado Cash has been used to “launder more than $7 billion worth of virtual currency since its creation in 2019.”
“This includes over $455 million stolen by the Lazarus Group, a Democratic People’s Republic of Korea (DPRK) state-sponsored hacking group that was sanctioned by the U.S. in 2019, in the largest known virtual currency heist to date. Tornado Cash was subsequently used to launder more than $96 million of malicious cyber actors’ funds derived from the June 24, 2022 Harmony Bridge Heist, and at least $7.8 million from the August 2, 2022 Nomad Heist,” the announcement said.
Financial privacy needed in donations
Meanwhile, Coleman, co-founder of the firm Counterfactual, said that giving to Ukraine during wartime necessitated financial privacy as he hinted on his Twitter post that protocols, such as Tornado Cash, are vital in some instances.
Wanting to donate to Ukraine is a great example of a valid need for financial privacy: even if the government where you live is in full support, you might not want Russian government to have full details of your actions.
— Jeff Coleman | Jeff.eth (@technocrypto) August 9, 2022