A daring attacker seizes control of Tornado Cash’s governance, exposing the vulnerability of decentralized exchanges and sparking a quest for redemption in the crypto community.
Tornado Cash, a decentralized crypto mixer, faced another setback as an attacker successfully gained full control of its governance through a malicious proposal. This event highlights the growing importance of transparency and decentralization for exchanges to rebuild customer trust, following the collapse of FTX.
On May 20 at 3:25 ET, the attacker managed to grant themselves 1.2 million votes through the malicious proposal, surpassing the 700,000 legitimate votes. This granted them total control over Tornado Cash governance.
The details were shared by @samczsun from Paradigm, a research-driven technology investment firm. The attacker claimed that their proposal followed a similar logic to a previous successful proposal, but with an additional function.
According to @samczsun:
“The attacker used the emergencyStop function to update the proposal logic after it was passed, allowing them to grant themselves fake votes.”
With full control over Tornado Cash governance, the attacker could withdraw all locked votes, drain the tokens in the governance contract, and disrupt the router. As of now, they have withdrawn 10,000 votes as TORN and sold them, as reported by samczsun.
This incident serves as a reminder for crypto investors to thoroughly review proposal descriptions and logic. The Tornado Cash community, known as Tornadosaurus-Hex or Mr. Tornadosaurus Hex, confirmed that all funds in Governance are potentially compromised. They urged members to withdraw their locked funds.
In an attempt to address the situation, the community tried deploying a contract to revert the changes while advising fund withdrawals. Cointelegraph also received a distress call from a Tornado Cash community developer, confirming the attack and stating:
“There was an attack on the protocol this morning that you already know about. Another community developer and I have been considering our options, but the situation seems almost hopeless. Currently, the attacker controls Governance.”
The team is actively seeking Solidity developers to help salvage the protocol. They are also seeking contact with Binance, as the exchange possesses more tokens than the attacker.
In the meantime, a former Tornado Cash developer reportedly aims to build a new crypto mixing service from scratch, addressing the “critical flaw” present in Tornado Cash. Their solution aims to empower the community to defend against hackers while upholding crypto ideals without resorting to excessive regulation.