Last Updated on August 14, 2022 by Bitfinsider

The price of TORN, the Tornado Cash token, has dropped significantly over the past 24 hours following the Friday arrest in Amsterdam by Dutch police of a suspected developer of the crypto transaction mixing protocol.

Tornado Cash observed a dramatic decline in deposits and an increase in withdrawals following the US Treasury’s inclusion of the mixing protocol on its list of sanctioned parties.

Only $6 million, according to sources, has been deposited into the system because of the sanctions. The figures show a 79% decline from the same period the week before.

Since February, Tornado Cash (TORN) has decreased 97%

In New York, TORN was down almost 16% to $14.23 at 3:03 p.m. Since the token’s all-time high on February 13, 2021, its value has dropped by over 97%. In contrast, the value of well-known cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) has dropped during the past day by only 3.2% and 0.9%, respectively.

Tornado Cash is one of the most widely used platforms for crypto-transaction anonymization, according to the US Treasury.

The decentralized privacy solution has been placed on a watch list by the Treasury after it was allegedly used to launder $7 billion in illegally obtained bitcoins.

According to the Treasury, a North Korean hacking group involved in the $625 million attack on the blockchain game project Axie Infinity in March used Tornado Cash, which was introduced in 2019. The group also used it for other cybercrimes.

Denied Access

Following the revelation of the sanctions, access to Tornado Cash has also been restricted. Users may no longer access the project’s Discord channel, and access to its governance forums and Github sites has also been banned.

According to CoinMarketCap, the market capitalization of TORN is at $135 million. In contrast, the market value of Bitcoin is somewhere around $455 billion.

Holders of the so-called governance token can also vote on protocol modifications. The company’s founders and early backers make up the majority of the stockholders.

According to the US Treasury’s Fiscal Information and Investigation Service (FIOD), the criminal investigation into Tornado Cash began in June of this year.

The US Treasury’s “blacklist” of privacy-related applications does not only include Tornado Cash. After Blender was charged with facilitating the laundering of $21 million taken in the Ronin Bridge hack, the Treasury imposed sanctions on the company a month earlier.

A especially harsh crypto winter seems to be affecting the Tornado Cash community. As investors continue to reject the protocol, it appears that shutdowns, arrests, and penalties have done a great deal of damage to the business in addition to the current bear market.

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