At the time of writing, it is unclear when the proposal will be enforced.
The original Tornado Cash governance tokenholders are set to reclaim power over the protocol's operations.
The attacker had previously shifted control by introducing a proposal that won them a staggering 1.2 million votes. This impressive voting power allowed the attacker to pass further suggestions, leading to the successful takeover of control over governance tokens that were previously vested. This shift resulted in a change in authority in the protocol's governance, essentially placing control in the hands of the attacker.
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In an unexpected twist, however, the attacker proposed a plan to restore governance control to the original token holders of Tornado Cash. This surprising move sparked intrigue as the crypto community sought to understand the motivations behind the proposal.
On May 26th, the governance proposal was successfully passed, with 517,000 votes in favor of the proposal and no votes against it. Although the hack did not impact the protocol itself, the malicious actor managed to steal a stack of tokens.
The crypto analytics site Nansen's data journalist, Martin Lee, revealed that the attacker had stolen 483,000 Tornado Cash (TORN) tokens. The attacker then converted most of these stolen tokens into 485 Ether (ETH), equivalent to roughly $890,000. The move left the attacker with 39,000 TORN tokens, valued at approximately $160,000.
The ETH, interestingly, was partially laundered through Tornado Cash, creating an additional layer of complexity to the transactions.
Tornado Cash had previously faced issues in August 2022, when the United States Treasury sanctioned it amidst allegations of facilitating money laundering. However, to this day, some entities are fighting to force authorities to drop the sanctions.
In April, six individuals backed by crypto exchange Coinbase filed a motion arguing that OFAC has overreached its legal boundaries under the International Emergency Economic Powers Act (IEEPA) and infringed on the free speech clause of the US Constitution's First Amendment.
The crypto community watches as the story unfolds, highlighting the importance of secure and accountable governance in decentralized systems.
