Geoff White

What you want is to ship the money to, I don't know, you want to buy widgets in Frankfurt, ball bearings in Frankfurt. You want to pay somebody off in Brazil. You want to get hold of missile technology secrets in Afghanistan. You want the money mobile. You want it flexible. So you want to be able to move it around. And also, $625 million is a huge quantity of money.

What you want is to ship the money to, I don't know, you want to buy widgets in Frankfurt, ball bearings in Frankfurt. You want to pay somebody off in Brazil. You want to get hold of missile technology secrets in Afghanistan. You want the money mobile. You want it flexible. So you want to be able to move it around. And also, $625 million is a huge quantity of money.

You've got to take it somewhere where there's enough liquidity that somebody will buy that cryptocurrency off you in exchange for cash. Well, fiat money, dollars, pounds, yen, whatever. And so this was the challenge that North Korea was faced with, if indeed it was they behind the hack.

You've got to take it somewhere where there's enough liquidity that somebody will buy that cryptocurrency off you in exchange for cash. Well, fiat money, dollars, pounds, yen, whatever. And so this was the challenge that North Korea was faced with, if indeed it was they behind the hack.

that they were trying to take this money somewhere that could absorb it and turn it around and give it back to them in cold, hard currency.

that they were trying to take this money somewhere that could absorb it and turn it around and give it back to them in cold, hard currency.

By this point, the wallets into which the crypto had been transferred, the stolen money from Axie had been transferred into crypto wallets. And those wallets were flagged as being recipients of crime.

By this point, the wallets into which the crypto had been transferred, the stolen money from Axie had been transferred into crypto wallets. And those wallets were flagged as being recipients of crime.

And the law enforcement had acted quite quickly and gone around to the major exchanges, the big legitimate crypto exchanges, and said, hey, if anybody tries to transfer you money from that wallet there, don't take it because it was stolen from Axie. And so they tried, I think, $60 million worth of exchanges, the hackers, at legitimate sort of above the line, above the board exchanges.

And the law enforcement had acted quite quickly and gone around to the major exchanges, the big legitimate crypto exchanges, and said, hey, if anybody tries to transfer you money from that wallet there, don't take it because it was stolen from Axie. And so they tried, I think, $60 million worth of exchanges, the hackers, at legitimate sort of above the line, above the board exchanges.

And that money all got frozen because, of course, as soon as the exchanges received the money, they went, oh, this is the stolen Axie money. Yeah, we're keeping this. And so the hackers lost tens of millions of the stolen money because they tried to pump it through the legitimate system. And the legitimate system just froze it. So then they needed to find somewhere else.

And that money all got frozen because, of course, as soon as the exchanges received the money, they went, oh, this is the stolen Axie money. Yeah, we're keeping this. And so the hackers lost tens of millions of the stolen money because they tried to pump it through the legitimate system. And the legitimate system just froze it. So then they needed to find somewhere else.

Where can you go with hundreds of millions of dollars of stolen crypto? And just put it in, no questions asked. And that's what led them to Tornado Cash.

Where can you go with hundreds of millions of dollars of stolen crypto? And just put it in, no questions asked. And that's what led them to Tornado Cash.

As this story sort of emerged, one of the people who'd used this particular mixer was Vitalik Buterin, who, of course, came up with the Ethereum protocol, I think co-developed it. And he said, look, this is exactly what I did. I wanted to donate to Ukraine. I didn't want to do it publicly. And that is the hazard of using crypto is it is public.

As this story sort of emerged, one of the people who'd used this particular mixer was Vitalik Buterin, who, of course, came up with the Ethereum protocol, I think co-developed it. And he said, look, this is exactly what I did. I wanted to donate to Ukraine. I didn't want to do it publicly. And that is the hazard of using crypto is it is public.

So I used a mixer because I want to preserve my privacy. There are good privacy-preserving reasons to use something like Tornado Cash. And that's, I suspect, the reason Tornado Cash was set up largely was for those privacy-preserving reasons.

So I used a mixer because I want to preserve my privacy. There are good privacy-preserving reasons to use something like Tornado Cash. And that's, I suspect, the reason Tornado Cash was set up largely was for those privacy-preserving reasons.

You've understood exactly, that's precisely what it is. At least that's what the claim was from inside Tornado Cash. As we'll talk about later on, others have cast a lot of doubt on that. But certainly that was the claim. Look, Tornado Cash is this headless organization. And once you use it, you're effectively using an automated machine.

You've understood exactly, that's precisely what it is. At least that's what the claim was from inside Tornado Cash. As we'll talk about later on, others have cast a lot of doubt on that. But certainly that was the claim. Look, Tornado Cash is this headless organization. And once you use it, you're effectively using an automated machine.