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Laundering & ObfuscationDeposit-to-Exit Flow by Service Type: Where Funds Re-Emerge and How to Find Them

Deposit-to-Exit Flow by Service Type: Where Funds Re-Emerge and How to Find Them

framework

Core idea

When funds enter an intermediary service, whether you can follow them out on-chain depends on ONE property: does the service deliver the funds to a new address unlinked from the deposit (the trail BREAKS on-chain), or to an address the user specified inside the transaction (the trail CONTINUES on-chain)? Two corrections this note exists to fix: (1) a mixer’s deposit wallet is NOT where the money re-emerges, it comes out at a fresh, unlinked wallet; (2) “same address, different chain” is a BRIDGE property, not a mixer property, a mixer normally pays out on the SAME chain to a DIFFERENT wallet.

Components

1. Decentralized mixer, e.g. Tornado Cash (TRAIL BREAKS)

  • Deposit address: attacker wallet A sends a fixed denomination (e.g. 100 ETH) to the pool contract.
  • Where it goes from there: locked in the pool contract, pooled with everyone else’s same-denomination deposits; no operator can move it; it leaves only when a valid zk proof is submitted.
  • Where it ends up: a fresh wallet B the attacker controls: SAME chain, NO on-chain link back to A.
  • How to find the exit address: no followable edge. Enumerate the pool’s withdrawals filtered by denomination, then correlate on timing + relayer + gas + address-reuse convergence. Result is #probable at best (a probabilistic demix, not a cryptographic break).

2. Cross-chain bridge (TRAIL CONTINUES)

  • Deposit address: wallet A sends to the bridge contract on chain A; the call encodes a destination address + destination chain.
  • Where it goes from there: the bridge locks/holds (or burns) the funds on chain A.
  • Where it ends up: the bridge mints/releases the equivalent on chain B to the specified destination - often the SAME address on chain B, sometimes a different one.
  • How to find the exit address: decode it from the deposit tx: “decode input data” + logs for the recipient field and destination chain ID; resolve the ID at chainlist.org; convert address format if needed; verify by matching value + timing on chain B.

3. DEX / protocol swap, e.g. THORChain (TRAIL CONTINUES)

  • Deposit address: wallet A sends token X into the router/pool/vault (THORChain: a vault with a memo encoding the destination).
  • Where it goes from there: swapped atomically inside the protocol in the same tx; the router does not retain custody.
  • Where it ends up: output token Y (THORChain: native asset on another chain) to the recipient named in the swap/memo, same or another chain.
  • How to find the exit address: read the emitted Swap events / decode the memo; follow the output token to the recipient.

4. Centralized service, CEX or centralized mixer (TRAIL BREAKS)

  • Deposit address: wallet A sends to a service-assigned deposit address; custody transfers to the service.
  • Where it goes from there: swept into the service’s hot/omnibus wallet; on-chain it is commingled, and the real accounting lives on the service’s internal off-chain ledger.
  • Where it ends up: on withdrawal the service pays out from its hot wallet to any address the customer requests, no on-chain link between deposit and withdrawal.
  • How to find the exit address: not on-chain: the link is in the service’s KYC records; requires a subpoena / VASP disclosure request. On-chain you see only ”→ into the exchange hot wallet.”

Grouped by outcome

  • TRAIL BREAKS (funds re-emerge at a new, unlinked address): mixers + centralized services → demix probabilistically (denomination + timing + reuse) or go off-chain (subpoena).
  • TRAIL CONTINUES (destination is written into the transaction): bridges + DEX/protocol swaps → decode the destination and verify.

When to use

When funds hit any intermediary service and you must decide whether to keep tracing forward on-chain or switch to demix/subpoena. Also the antidote to two common mistakes: looking at the mixer deposit wallet for the exit money, and looking on only one chain, a single 0x address exists on every EVM chain, so a bridge exit “on the same address” hides on whichever chain you didn’t check.

Example

CASE-2026-002 (Hinkal): ~400 ETH went into Tornado’s 10/100 ETH pools; the exit (~410 ETH on a fresh wallet) was found only by denomination + timing + reuse convergence (#probable), never by following the deposit wallet. Contrast the same case’s THORChain/bridge leg, where the destination could be read straight out of the deposit transaction and confirmed by value + timing.

How Mixers Process Funds, Types of Mixers and Tumblers, Filter Mixer Withdrawals by Denomination Not USD, Identify a zk Shielded-Pool Withdrawal On-Chain, Decoding a Cross-Chain Destination Address from Input Data, Cross-Chain Obfuscation Categories, EVM Multi-Chain Tracing Essentials, Chain Hopping / Cross-Chain Bridging, Breaking Obfuscation Five-Part Strategy

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