Recent incidents around Tornado Cash are making experts doubt the credibility of DeFi founders

Tornado Cash is a popular cryptocurrency mixer that recently went down and brought down several other cryptocurrency platforms along with it, and that too at a time when the entire crypto market has been struggling with intense volatility. Recently, the Dutch financial crime agency arrested a developer who worked for the Tornado Cash platform, allegedly for concealing criminal financial flows and facilitating money laundering. After this, the US Department of the Treasury's Office of Foreign Assets Control sanctioned Tornado Cash, which has been used to launder more than US$7 billion worth of cryptocurrencies since its creation in 2019. This also includes the US$455 million worth of assets stolen by the Lazarus Group, a DPRK state-sponsored hacking group, known for conducting the largest known virtual currency heist to date.

After this incident, crypto experts are criticizing all such platforms that offer privacy-protecting services. Basically, Tornado Cash is an application that obscured Ethereum transactions, which has made it popular with traders who want to maintain their privacy. But the US Treasury did not find any productive services that would make the platform stand out from its competitors. Also, after the platform's developer was arrested, the crypto market is condemning almost all Defi developers and founders who offer decentralized services.

After this incident, several prominent DeFi project founders have stated that they have begun to prevent the use of their own front-ends by crypto wallets that are in any way tied to the Tornado Cash platform. Other companies established around the NFT marketplace, like OpenSea have likely started conducting operations in the same way.

DeFi emerged as the alternative to the traditional economic system that offers many of the same services that traditional financial services offer. But without permissionless access, crypto risks recreate the old way with more convoluted steps. After the increased number of crypto scams, it is only reasonable for crypto experts to question the credibility of DeFi founders and developers.

More Trending Stories