The governance token holders of Tornado Cash will soon regain control over the protocol’s operations, thanks to the attacker’s unexpected proposal.
This development enables the community to regain control and guide the protocol toward recovery and enhanced security.
On May 26, the proposal to restore control to Tornado Cash’s original governance token holders was approved.
Five hundred seventeen thousand token votes were cast in favor of the proposal, with none against it.
This resolution swiftly concludes a governance takeover that, fortunately, had no effect on the protocol itself but did result in the theft of specific governance tokens.
By orchestrating a successful takeover of the protocol’s governance system, the attacker manipulated a malicious proposal that earned them 1.2 million votes.
Using this substantial voting power, they could pass additional recommendations and ultimately seize control of previously vested governance tokens.
Their strategies enabled them to manipulate the authority structure, resulting in a power transfer in their favor.
Just a few hours after the hack, the attacker contacted the Tornado Cash community with a proposal to regain governance control.
This unexpected action piqued curiosity and prompted further investigation into the attacker’s intentions and motivations.
According to data journalist Martin Lee of the crypto analytics website Nansen, the attacker was able to steal 483,000 Tornado Cash (TORN) tokens.
Subsequently, they engaged in a series of swaps, exchanging most of the stolen tokens for approximately $890,000 worth of Ethereum.
This strategic maneuver netted them 39,000 TORN, worth roughly $160,000. A portion of the ETH was cleverly routed through Tornado Cash, adding a layer of anonymity to the transaction to conceal the source of the funds.
Tornado Cash, the Ethereum blockchain-based crypto mixing service, was officially sanctioned by the United States Treasury in August 2022 amid controversy.
The sanctions stem from allegations that the protocol was used to launder money.
