In an unexpected twist to an alarming situation, the individual who recently assumed control of Tornado Cash’s governance through a malicious cyber-attack has hinted at returning authority to its rightful place.
Notwithstanding the controversial nature of the proposal, the Tornado Cash community finds itself with few alternatives, sparking concerns and debates amongst members.
What happened to Tornado Cash?
On May 21st, panic struck the Tornado Cash community as a malicious entity effectively took over governance. The hijacker had the power to inflict severe damage by withdrawing all locked votes, draining tokens from the governance contract, and compromising the router.
This unanticipated situation caused widespread concern within the community, leaving many to question the security and stability of the Tornado Cash platform.
During this critical period, community member Tornadosaurus-Hex, commonly referred to as Hex, stepped up to mitigate potential fallout. Hex submitted a subsequent proposal urging all members to withdraw funds locked in governance.
Despite this quick response, Hex, along with many others, expressed uncertainty about its effectiveness, given the perpetrator’s firm control over governance.
A change of heart?
To the community’s astonishment, the attacker made contact a few hours later, submitting a new proposal which suggested a willingness to restore governance control to its original state.
Hex relayed the attacker’s plan to the Tornado Cash community, stating, “The attacker posted a new proposal to restore the state of Governance. I think that there is a good chance he’s going to execute it.”
Hex further indicated that while the community has no real alternative but to accept the hacker’s proposed course of action, their due diligence to verify storage layouts appears valid.
However, this unexpected turn of events left some community members skeptical, with speculation that the attacker’s motive might be to boost the TORN token’s price before selling their holdings.
Market reaction and community speculations
In an encouraging response to the unusual situation, the Tornado Cash token (TORN) saw a 10% increase following the attacker’s proposal to reverse their actions.
The initiative implies the potential return of the TORN tokens that the hacker allocated to themselves, effectively restoring the governance votes balance.
Based on the considerable amount of TORN governance tokens held by the attacker, it is highly likely that the proposal will be approved once the voting period ends on May 26th.
The execution timeline remains unclear, but the proposal’s passage would eliminate the malicious code that allowed the hijacker to usurp voting power. Consequently, governance control of Tornado Cash’s Decentralized Autonomous Organization (DAO) would revert to token holders.
Despite the immediate positive market response, community member 0xdeadf4ce raised concerns about a potential “gigatroll” scheme, suggesting the incident could have been designed to depress token prices before buying in at a discount.
While the community remains divided over the attacker’s intentions, they unanimously agree on the importance of this proposal in determining the future of Tornado Cash governance.
The recent incident, however disturbing, can be seen as a wake-up call for the broader cryptocurrency ecosystem. Interestingly, statistics show that crypto hacks in general have seen a decline in the first quarter of 2023, providing some level of comfort for investors and stakeholders in the space.