Elliptic: Tornado Cash Was a Key Service for NFT Scammers

The U.S.-sanctioned cryptocurrency mixer Tornado Cash was a preferred instrument for laundering funds obtained from fraud involving NFT. According to a report by analytics firm Elliptic.

According to them, mixer service was a source of crypto assets totaling $137.6 million, processed by NFT marketplaces. With its help, 52% of illicit NFT-related proceeds were laundered.

“The widespread use of Tornado Cash for NFTs-related fraud underscores the need for effective oversight by NFT platforms,” the analysts added.

Tornado Cash did not comment on the information.

According to Elliptic, overall since 2017, criminals have laundered more than $8 million through NFT marketplaces, representing 0.02% of total trading volume.

In the same period, crypto mixers processed $328.6 million (0.81%) related to the non-fungible token market. Part of this sum may reflect proceeds from illicit activity.

From July 2021 to July 2022, tokens worth over $100 million were stolen.

As reported by OFAC on August 8, the cryptocurrency mixer Tornado Cash was added to the sanctions list on suspicion of laundering $7 billion in cryptocurrency.

On August 12, Dutch authorities arrested the developer of the service, Alexey Pertsev. Authorities suspect him of involvement in laundering funds and concealing criminal financial flows.

Last week Celsius Network said in a lawsuit that its former head of capital management at KeyFi and its founder Jason Stone stole assets worth millions of dollars, including by converting them into hundreds of NFTs and using Tornado Cash.

Telegram — Read ForkLog’s Bitcoin news on our Telegram — cryptocurrency news, prices and analysis.