New mixer protocols used by at least 14 confirmed rug-pull operators since January 2026 — an investigation into how scam proceeds are being laundered through Tornado Cash successors.
The Landscape
Following the OFAC sanctions against Tornado Cash in 2022, a new generation of privacy protocols has emerged. InvestorWatchdog has identified at least six active successor protocols that have been used to launder proceeds from confirmed investment scams since January 2026.
The Methodology
Using blockchain analytics, InvestorWatchdog traced funds from 14 confirmed rug-pull operations through these protocols. In several cases, we were able to follow the funds to centralised exchange deposit addresses, providing law enforcement with actionable intelligence.
Regulatory Response
OFAC has sanctioned two of the six protocols identified. The remaining four continue to operate. The EU’s MiCA regulation includes provisions that may affect these protocols, but enforcement remains limited.
What This Means for Victims
The use of mixer protocols significantly reduces the chance of fund recovery. However, it does not make recovery impossible — law enforcement agencies with blockchain analytics capabilities have successfully traced funds through these protocols in several cases.