A return to normalcy appears to be on the horizon for the users of Tornado Cash, as a proposal that grants governance authority back to the token holders has been passed.
This noteworthy move takes the reins from an attacker who had managed to wrestle control, potentially setting the stage for the protocol’s future recovery and enhanced security.
The recent proposal, intriguingly put forth by the attacker, ensures the restoration of control to the token holders, thus enabling the community to regain authority over the protocol’s operations.
An unexpected twist in Tornado Cash governance
On May 26, the proposal to hand back control to the Tornado Cash governance token holders was given a unanimous nod of approval. The proposal secured a staggering 517,000 token votes in favor, with zero opposition.
This outcome marks an abrupt end to a governance takeover, which, while not affecting the protocol, did result in a governance token theft.
The attacker had skilfully orchestrated a seizure of the protocol’s governance mechanism, leading to a malicious proposal that awarded them 1.2 million votes.
With this considerable voting strength, they passed a series of proposals, consequently taking over control of the earlier vested governance tokens. Their calculated moves allowed them to tamper with the governance framework, leading to a shift of control in their favor.
However, in an unforeseen development, the attacker reached out to the Tornado Cash community a few hours post the attack, suggesting a proposal to restore governance control.
This unexpected move took many by surprise, leading to speculation and a closer examination of the attacker’s underlying motives.
The aftermath and future implications
As pointed out by data journalist Martin Lee from crypto analytics site Nansen, the attacker was able to pilfer 483,000 Tornado Cash (TORN) tokens.
Following the theft, they orchestrated a series of swaps, converting the bulk of the stolen tokens into 485 Ethereum (ETH), worth around $890,000. This strategic shift left them holding 39,000 TORN, estimated to be worth about $160,000.
In a bid to disguise the source of the funds, a segment of the ETH was smartly funneled through Tornado Cash, adding an extra veil of anonymity to the transaction.
The Ethereum blockchain-based crypto mixing service, Tornado Cash, was mired in controversy last year when it was officially penalized by the United States Treasury in August 2022. The punitive action arose from accusations that the protocol was being exploited for money laundering.
This recent turn of events could signify a critical phase in the rehabilitation of Tornado Cash, as token holders reassume their governance authority.
It serves as a testament to the dynamism and resilience of the crypto world, underlining the capacity to recover and implement improved security measures after setbacks. The wider crypto community will be watching closely to see how Tornado Cash handles the next steps in its recovery.