North Korean hackers transferred $11M in stolen Ether to Tornado Cash early Monday.
The July hack drained WazirX of over $150M, including SHIB worth of $100M alone.
Restructuring efforts continue as WazirX grapples with a significant financial blow.
The blockchain data tracker Arkham Intelligence revealed that the WazirX hacker has moved 5,000 ETH, worth over $11 million. The hacker moved the fund to Tornado Cash on early Monday. This move is believed to be linked to North Korea and is seen as an effort to hide the digital trail of the stolen funds.
WazirX’s $230M Hack
The breach which happened in July had targeted one of WazirX’s multisig wallets, leading to a substantial loss of crypto assets, including $100 million in SHIB, $52 million in Ether (ETH), and other cryptocurrencies. This theft represented a significant portion of the exchange’s reserves, accounting for over 45% of its total holdings as reported in June 2024.
Transaction Analysis
According to the details provided by Arkham, the illicit funds were moved to a new address at exactly 07:19 UTC. Shortly after the initial transfer, an additional $1.2 million in tokens was distributed across five separate transactions to Tornado Cash, a platform known for its ability to mix large volumes of crypto to mask the origins of funds.
Security Implications
The above incident highlights a critical vulnerability in the security protocols of crypto exchanges. Tornado Cash, although a legitimate service, has been frequently utilized by criminal entities to launder money. Hence, complicating efforts by law enforcement to track and recover stolen assets.
Market Impact and WazirX’s Response
The breach has had a profound impact on WazirX, prompting the exchange to enter a restructuring process aimed at clearing liabilities and safeguarding investor interests. These steps are critical as the exchange navigates through the regulatory and trust hurdles now heightened by the security breach.
The continuous use of mixing services like Tornado Cash by hackers give an important reminder of the challenges faced in regulating crypto spaces to prevent money laundering. For WazirX, recovering from this significant setback involves not only enhancing their security measures but also restoring confidence among its users and stakeholders.
The incident has caused a lot of talk in the cryptocurrency world, particularly from Sumit Gupta, the CEO of the Indian crypto exchange called Coindcx. Gupta has strongly criticized Wazirx for how they dealt with the situation, especially their decision to make their customers bear much of the losses.
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