Key Takeaways:
- A hacker compromised the crypto mixer protocol Tornado Cash on May 20.
- The attacker tabled a proposal that would undo the attack.
NEW DELHI (CoinChapter.com) — Crypto mixer platform Tornado Cash was the victim of an attack on May 20. The attack resulted in the DAO overseeing the platform’s operations effectively losing control over the protocol.
The attacker tabled a proposal earlier, replacing the contract logic with malicious code that granted them 1,200,000 fake votes. Deploying the contract required a separate deployer contract.
Later, the attacker, or a group of attackers, posted a proposal that might ‘seemingly‘ help the DAO regain control over the crypto mixer platform. However, due to the hack, the malicious elements might withdraw all the locked votes, drain tokens in the governance contract, or brick the platform’s router.
Paradimn researcher Samczsun noted that the Tornado Cash Nova was also at risk. The attacker could drain the pool’s ETH if they upgrade the contract. Furthermore, the attacker has already drained the locked votes in the contract.
Another Twitter user, 0xdeadf4ce, noted that the attackers were either “giga trolling” or the attackers might be giving Tornado Cash a “disastrous lesson in governance security.”
Community member Tornadosaurus-Hex noted that the new proposal from the attacker might not be malicious.
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If the proposal goes through (and it isn’t malicious) governance should be aware that they have to kill every single proposal which includes some type of SELFDESTRUCT call.
Tornadosaurus-Hex noted
The latest proposal would likely pass since the attacker controls most votes. Interestingly, Tornado Cash has often been a part of most crypto-related exploits, as hackers often use the service to anonymize their loot.
Hack A Way To Manipulate TORN Price?
The attacker draining the locked votes fuels the speculation that price manipulation could be the reason behind the attack. As news of the exploit surfaced, TORN’s price dropped 36% on May 21 to form a daily low near $3.68.
However, news of the attacker’s latest proposal buoyed prices, which resulted in the Tornado Cash governance token’s price rallying 9% to a daily high of $4.63 on May 22. Unless the situation worsens, TORN’s price might rise to its resistance near $5.
An uptrend could help TORN price challenge its 20-day EMA (red wave) near $5.8 before retreating.
On the other hand, the more likely scenario might be the attackers booking profits, forcing the Tornado Cash token to drop to its support level near $4.1. Moreover, breaching the immediate support might result in TORN’s price dropping 27% to test the support near $3.37.
Meanwhile, the relative strength index for TORN remained precariously near the oversold level, with a value of 32.3 on the daily charts.
