Empirical Analysis of Cryptocurrency Mixer: Tornado Cash

Abstract

Decentralized and anonymous transactions have become possible with the advent of cryptocurrency. However, these characteristics make it challenging to trace the origins of illegally obtained funds. Furthermore, mixing services, which sever a connection between the previous and current owners of cryptocurrencies, are used to increase the anonymity of cryptocurrencies. Tornado Cash, which is frequently used as a mixing service, has been reported as a destination for a significant number of cryptocurrencies that are associated with criminal activity. In this research, we cluster and analyze the deposit addresses in Tornado Cash, list potential criminal addresses, and clarify the actual situation of money laundering in Tornado Cash. Moreover, we focus on NFT phishing incidents and determine the circumstances of the incidents and the total amount of damage relating to Tornado Cash.