WazirX Hacker Moves $6.5M in Stolen Crypto to Tornado Cash
In a significant development following the July 2024 hack of Indian cryptocurrency exchange WazirX, blockchain security firms have detected the movement of stolen funds through a controversial mixing service. The hacker, responsible for one of the largest crypto thefts in India’s history, has transferred approximately $6.5 million worth of Ethereum (ETH) to Tornado Cash, a sanctioned cryptocurrency mixer.
According to reports from multiple blockchain analytics firms, including PeckShield, Cyvers, and Arkham Intelligence, the hacker conducted a series of 26 transactions, each moving 100 ETH to Tornado Cash. This maneuver, executed over the course of just one hour on September 3, is a common tactic employed by cybercriminals to obscure the trail of stolen funds and hinder law enforcement efforts to track and recover the assets.
Tornado Cash, which allows users to exchange tokens while masking wallet addresses, has been a subject of controversy. In August 2022, the U.S. Treasury Department sanctioned the platform, citing its use in laundering over $7 billion worth of virtual currency since its inception in 2019. Despite the ban in the United States, Tornado Cash continues to operate in various jurisdictions globally.
The movement of funds comes at a crucial time for WazirX and its users. The exchange, which lost over $235 million in the July 18 exploit, is currently undergoing a restructuring process in Singapore. WazirX has implemented a 66% limit on users’ Indian rupee withdrawals and has filed for a six-month moratorium to allow its holding company, Zettai, to restructure its liabilities.
The hack and subsequent events have raised significant concerns about the security of cryptocurrency exchanges and the challenges faced by users in recovering their assets following such incidents. The use of mixing services like Tornado Cash by hackers further complicates the efforts of law enforcement and regulatory bodies in tracking and recovering stolen funds.
As WazirX works through its restructuring process, the crypto community watches closely. The exchange has announced that trading will resume once creditors approve the restructuring proposal and the court sanctions it. However, the recent movement of stolen funds serves as a stark reminder of the ongoing risks and challenges in the cryptocurrency space.
