Elliptic appreciated the risks of popular cryptocurrency mixers
Elliptic experts analyzed six popular cryptocurrency mixers based on Ethereum, which are mentioned as potential alternatives to US Tornado Cash sanctions.
The review includes Railgun, Buccanee V3, White Ethereum, 0XTIP, Messier 87 Black Hole and Cyclone Protocol. According to analysts, the tested protocols in the aggregate processed transactions worth more than $ 41.5 million – 0.6% of the amount of funds mixed Tornado Cash.
Of these, $ 40,000 (0.1%) were obtained as a result of thefts in the Defi segment. This amount includes $ 37,000 out of $ 270,000, stolen during the June attack on the Xwin Finance protocol. Another $ 100,000 came directly from Tornado Cash, a small part of these funds was sent after the imposition Exotic consensus of sanctions.
“Current indicators indicate the insignificant use of the services under consideration for criminal purposes at this stage,” said Elliptic.
The most popular mixing assets are ETH, BNB, WrappeD ETH and USDT. However, these data do not include Polygon -based assets.
Many protocols are based on “improved” forks of the Tornado Cash smart contract, although their small liquidity pools make large-scale mixing less feasible, the researchers added.
The highest limits of mixing in Cyclone Protocol services (100 ETH/100,000 USDT) and Railgun (without restrictions) – they account for more than three quarters of the total amount of funds processed by the studied punctures.
The internal analysis of Elliptic was defined by the Mixer Cyclone Protocol as the most risky among the existing alternatives to Tornado Cash. The concern of the researchers is caused by:
- high transaction limits;
- relatively large liquidity of pools;
- the ability to mix Tornado Cash tokens;
- confirmed use for laundering part of the income from exploits of Defi;
- large amount of processed funds;
- anonymity and inactivity of the developer team.
The “medium-high” risk assessment received the Buccanee V3, in which throughout the development there were no problems with money laundering. BV3 uses the “bait mode”, which displays fake and changing BUCC balances in the interfaces of purse providers as additional confusion technique. The main softening factor for BV3 is the use of technology at the testing stage.
The remaining four protocols also have mitigating factors, which, according to Elliptic, are able to prevent large -scale illegal use:
- Railgun generates compliance reports and has a partially public team of developers.
- Messier 87 claims to be ready to provide the necessary reports at the request of the authorities.
- White Ethereum and 0XTIP are fighting low mixing limits and low liquidity bullets, respectively, which makes them an unusable replacement of Tornado Cash at present.
Recall, on August 8, OFAC imposed sanctions against the Tornado Cash mixer. The department suspected a platform of laundering about $ 7 billion since 2017. Over $ 455 million of them were associated with North Korean hackers.
Within a month after the sanctions of the Tornado Cash liquidity pool, about 60%decreased, which reduced its potential to anonymize large -scale money laundering schemes.
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