Cross-chain Linked Address Sent $5.19 Million to Tornado Cash Amid Rising Privacy Demand

A cross-chain linked address sent 1,017 ETH and 212 BNB to Tornado Cash, totaling approximately $5.19 million on January 17, 2026 according to reports. This transaction highlights the platform's role in facilitating on-chain privacy, a feature that has seen increased demand amid regulatory scrutiny. Tornado Cash recorded over 6,000 active users in January, extending its user growth from December 2025.

The outflows from Tornado Cash have increased for five consecutive months, with over 531 transactions exceeding 10 ETH in December 2025. The platform's liquidity remains strong, with over 300 million ETH in deposits.

Privacy coins are expected to lead in 2026 as regulations push for more anonymity in crypto transactions. Andreessen Horowitz has identified privacy coin systems as a key advantage against government control and system shutdowns.

Why Did This Happen?

Regulatory actions have driven demand for on-chain privacy solutions. Tornado Cash's user base expanded significantly in 2025, reaching 6,000 active users in January 2026. This growth coincides with increased money-laundering concerns, according to industry observers.

Tornado Cash's outflows reflect the platform's popularity among users seeking privacy. With 5,828 withdrawals in December 2025, the platform has become a preferred choice for those looking to obscure transaction trails.

How Did Markets React?

Ethereum ETF inflows reached $149.2 million on January 16, 2026, driven by institutional interest. BlackRock's Ethereum ETF recorded the largest single-day inflow since December 9, 2025.

Ethereum's network activity also surged, with daily active addresses reaching a 28-month high of 995,779 on January 15. The Ethereum network processed 2.9 million transactions on January 16, the highest number on record.

Analysts see these trends as bullish for ETH, with some projecting a price target of $4,500. Institutional buying through ETFs and record on-chain activity have positioned Ethereum for a potential price increase.

What Are Analysts Watching Next?

Privacy-focused platforms like Tornado Cash face regulatory risks, particularly in jurisdictions with strict anti-money laundering laws. The growing demand for privacy coins could lead to new regulatory responses, which may affect market sentiment.

Mutuum Finance (MUTM) continues to attract early-stage investors, with over $19.8 million raised in its presale. The project is preparing to deploy its V1 protocol to a public testnet, marking a key milestone in its development.

Rezor has launched a non-custodial wallet designed for secure crypto access. The Rezor Wallet supports multiple blockchains and emphasizes Web3 security principles. This move reflects a broader industry trend toward user-controlled private keys and decentralized infrastructure.

Regulatory developments in India are also shaping the crypto landscape. The Ministry of Finance is in talks with Sebi and the RBI to establish a regulatory framework for crypto exchanges. These discussions may result in a unified regulatory body overseeing trading platforms, investor protection, and capital flows.