Tornado Cash hit by 79% decline in deposits as users rush for the exit
Quick Take
- Following the sanctions against Tornado Cash, users have largely stopped depositing into the protocol.
- At the same time, many have withdrawn their funds from it.
Tornado Cash saw a massive decline in deposits and an increase in withdrawals after it was sanctioned by the US Treasury.
Since the sanctions came down, just $6 million has been deposited into the protocol, according to data from The Block Research. This represents a 78.5% decline compared to the same length of time during the previous week.
At the same time, users have rushed to withdraw their funds, resulting in increased volumes overall. Since the sanctions were announced, $62 million has been withdrawn from the protocol, decreasing the amount of crypto held in its addresses by 15%. Out of that, $14.7 million was withdrawn in the first three hours alone.
The sanctions have had other impacts on the protocol's users. Circle has frozen $75,000 of USDC that was sitting in the addresses, crypto infrastructure services have started limiting access to the protocol and the decentralized exchange dYdX has started blocking accounts tied to it.
Beyond this, one user appeared to protest the sanctions by sending small amounts of ether from sanctioned wallets to wallets belonging to notable crypto individuals and celebrities, including Jimmy Fallon, Logan Paul, Randi Zuckerberg and Shaq.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
