The Tornado Cash community was left in shock after an attacker gained control over the project’s governance. However, the plot thickens as the attacker has now proposed a recovery plan, raising suspicions among community members. With the fate of Tornado Cash hanging in the balance, concerns are growing about potential market manipulation and the value of the project’s native token, TORN.
On May 21, Tornadosaurus-Hex, a vigilant community member, alerted others to the attacker’s new proposal aimed at restoring the state of Governance. The attacker’s control over Tornado Cash puts other governance members in a vulnerable position, as they have no choice but to accept the proposal. The community is apprehensive about the attacker’s intentions.
Market Manipulation Fears:
Amidst the chaos, some community members, such as 0xdeadf4ce, have raised concerns that the attacker’s recovery proposal might be a ploy to manipulate the price of TORN tokens. The original exploit had caused a drastic drop in TORN’s value, declining by 41% within hours. A successful recovery could potentially benefit the attacker by capitalizing on the increased value of any stolen cryptocurrency. However, the true intentions of the proposal remain uncertain until May 26, leaving the community in a state of suspense.
The Exploit and Its Consequences:
The attacker’s initial breach occurred on May 20 when they orchestrated a proposal that granted them complete control over Tornado Cash’s governance. This enabled them to withdraw all locked votes and tokens from the governance contract. Samczun, a researcher from Paradigm, highlighted the severity of the situation, emphasizing that the attacker had the power to do as they pleased. Astonishingly, the attacker opted to withdraw 10,000 TORN tokens and liquidate those assets.
Tornado Cash’s Resilience:
Despite facing such adversity, Tornado Cash continues to operate despite the sanctions imposed by the U.S. Treasury in August 2022. The decentralized coin mixer exclusively handles cryptocurrencies, making it challenging for the U.S. government to directly enforce sanctions. This situation raises questions about the government’s inability or lack of interest in enforcing such measures against decentralized projects like Tornado Cash.
Tornado Cash finds itself at a critical juncture, grappling with an attacker who wields control over its governance. The proposal for recovery has left the community on edge, fearing potential market manipulation. The value of TORN tokens hangs in the balance, awaiting the outcome of the recovery proposal, which will only become clear on May 26. As Tornado Cash remains active despite sanctions, it highlights the unique challenges faced by decentralized projects. The community anxiously awaits the future of Tornado Cash, hoping for a resolution that protects its integrity and the interests of its users.