Coinbase small withdrawals route $1.67M USDC via Tornado
193 small Coinbase withdrawals sent $1.67M USDC on June 23, swapped to ETH and deposited into Tornado Cash, per Zachxbt.
- 193 small withdrawals from Coinbase on June 23.
- Total of $1.67M USDC moved, swapped to ETH.
- Funds routed into Tornado Cash, flagged by Zachxbt.
On June 23, 2025, analytics researcher Zachxbt flagged a series of 193 small withdrawals from Coinbase. Instead of one large transfer, the funds—totaling approximately $1.67 million USDC—were split into multiple minor transactions. This fragmentation is often a tactic to avoid attracting attention or triggering automated tracking. 📉
Funds Converted and Laundered
Once the USDC arrived in a single destination wallet, it was swiftly swapped for ETH (Ether). Immediately after, the Ethereum was deposited into Tornado Cash, a privacy protocol that mixes funds to obscure their origin and destination. This method is widely recognized as a money laundering tactic, as Tornado Cash breaks linkage between sending and receiving addresses.
Broader Implications
This case highlights persistent efforts to use on-chain mixers to anonymize illicit or privacy-focused transfers. Despite being sanctioned in some jurisdictions, Tornado Cash remains operational and continues to attract large capital flows. These fragmented withdrawals from reputable exchanges like Coinbase may represent a significant hurdle for forensic analysis and regulation.
🚨 What This Means for Crypto Users
- Heightened Privacy vs. Illicit Risk
While Tornado Cash provides privacy, it’s increasingly seen as a tool for concealing illicit activity. - Regulatory Pressure on Mixers
Regulators are now more focused than ever on tracing and limiting mixer usage tied to large transfers. - Exchange Monitoring Intensifies
Exchanges like Coinbase may face more pressure to detect and prevent structuring through multiple small withdrawals.
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