While OFAC sanctions did reduce Tornado Cash’s activity, a recent report by Chainalysis shows that it is not easy to “pull the plug” on a decentralized protocol.

On-chain data before sanctions revealed that 34% of all funds sent to Tornado Cash originated from illicit sources, while illegal activity was concentrated on just crypto hacks and scams. For instance, the Harmony Bridge exploit last summer accounted for more than 65% of the mixer’s total stolen fund inflows during a period of 60 days before OFAC initiated sanctions against it.

Post sanctions, on the other hand, the coin mixer’s activity dropped significantly, but it hasn’t ceased completely. It is because Tornado Cash runs on smart contracts, which cannot be taken offline the way a centralized service can. Chainalysis, hence, concluded that OFAC or any other entity cannot do anything except impose legal consequences of sanctions violations stopping individuals from using it.