Following the August 2022 OFAC sanctions, Tornado Cash saw a dramatic collapse in activity, various blockchain analytics (firms such as Heights Labs) estimate inflows plummeting by roughly 85% of those in the pre-sanction period. While this drop in volume reflects the protocol’s effective isolation from mainstream crypto infrastructure, the nuance lies in how illicit usage evolved during that time.

In absolute terms, illicit fund flows declined significantly, dropping by approximately 75% and mirroring the overall contraction.

However, because legitimate usage fell even more sharply, illicit activity grew as a proportion of total volume. What emerged was a smaller, more concentrated user base, where criminal actors represented a disproportionately larger share of activity than before. This shift underscores how sanctions altered not just the scale of Tornado Cash’s use but also its risk profile, compressing total volume while making illicit behavior more prominent within it.