- There is now more than $1 billion in the privacy protocol, a new record.
- Whales tied to the PulseChain crypto project have poured into Tornado Cash.
- The activity makes it harder for smaller users to hide their identities.
The amount of money sloshing around in the privacy-enhancing tool Tornado Cash has never been higher.
“Right now, it appears a few big ‘whales’ are all dumping into Tornado Cash,” Taylor Monahan, the principal security researcher for MetaMask, told DL News.
Over the last 48 hours, nearly two dozen addresses linked to controversial crypto entrepreneur Richard Heart have been depositing millions of Ether into Tornado Cash, according to Monahan, wallet identifier Arkham Intelligence and onchain analytics reviewed by DL News.
On Friday, the total value locked in Tornado Cash hit $1.5 billion, according to data from DefiLlama. TVL is a metric used to measure investor deposits.
That figure is nearly double that of the protocol’s TVL at the start of the year.
Richard Heart appears to have acknowledged the wallet movements linked to him, but he has not directly addressed them publicly or in response to DL News’ request for comment.
PulseChain whale
At least 21 addresses tied to PulseX, an exchange on the PulseChain blockchain, have transferred over 116,000 Ether to Tornado Cash on Ethereum.
PulseX is controlled by Heart, according to the Securities and Exchange Commission.
At today’s prices, that amounts to more than $393 million — roughly a third of all of Tornado Cash’s current deposits.
PulseChain is a layer-1 blockchain and was launched by controversial crypto entrepreneur Richard James Schueler, also known as Richard Heart, in 2022.
The SEC charged Heart and three entities under his control — Hex, PulseChain, and PulseX — with an unregistered securities offering that raised more than $1 billion in 2023. Heart was also charged with fraud for misappropriating at least $12 million.
In December 2024, Interpol issued a red notice for Heart and added him to the organisation’s most wanted list for deliberate tax fraud and for assaulting a 16-year-old girl.
In April, the SEC dropped its case against Heart after a judge determined that his activities were not targeted at US investors.
What is Tornado Cash?
Tornado Cash is a crypto mixer that lets users pool cryptocurrency deposits into a smart contract and withdraw the same amount deposited from a new cryptocurrency address.
This process obfuscates the flow of funds by severing the connection between the depositor and the recipient.
In August 2022, the US Treasury’s Office of Foreign Assets Control sanctioned the Tornado Cash smart contract and website over claims that the privacy protocol had been used to launder more than $7 billion in cryptocurrencies, including funds stolen by the Lazarus Group, a North Korean hacking group.
Tornado Cash users sued, arguing it was a novel — and improper — use of the government’s power to levy sanctions.
They prevailed in court last year, and in March, the US Treasury lifted the sanctions, citing “novel legal and policy issues.” A subsequent court ruling forbade the agency from re-sanctioning the protocol, marking a massive win for crypto privacy advocates.
Two of the developers who created Tornado Cash were also hit with criminal charges in the Netherlands and the US.
In May 2024, a three-judge court in the Netherlands convicted Alexey Pertsev of laundering $2.2 billion in illicit assets on Tornado Cash, and sentenced him to prison for five years and four months.
In the US, Roman Storm was found guilty of conspiracy to operate an unlicensed money transmitting business.
Both developers have contested their convictions.
Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at liam@dlnews.com.