A recent investigation by blockchain analytics firm Cyvers has revealed that the hacker responsible for the massive $235 million theft from the Indian cryptocurrency exchange WazirX has transferred approximately $6.5 million worth of stolen funds through Tornado Cash, a controversial mixing service. This movement is part of the hacker’s attempts to launder the proceeds of the cyber heist.
Detailed Movements of Stolen Funds
According to Cyvers, the hacker moved 2,600 Ether (ETH), valued at around $6.5 million, into Tornado Cash. This was executed in 26 separate transactions of 100 ETH each, all within a single hour. Following these transactions, data from the crypto tracking platform DeBank shows that the wallet’s total balance plummeted from $6.7 million to just $154,000.
WazirX’s Response to the Hack
This illicit transfer occurred around the same time WazirX announced an early withdrawal opportunity for users, allowing them to withdraw up to 66% of their INR (Indian Rupee) denominated balances, a decision aimed at easing customer concerns and stabilizing the platform. Originally scheduled for September 9, the accelerated withdrawal timeline was part of the exchange’s broader effort to resume normal operations after the disruptive July 18 hack.
Ongoing Legal and Operational Challenges
WazirX is currently navigating significant legal and operational hurdles as it works to recover from the incident. Since reinstating INR withdrawals on August 26—where 34% of rupee-denominated balances remain frozen due to ongoing investigations—the exchange has been entangled in legal proceedings in Singapore related to its restructuring efforts. These efforts aim to address both the direct impacts of the hack and underlying vulnerabilities within the exchange’s security framework.
Industry Implications
The use of mixing services like Tornado Cash, which was sanctioned due to its role in obscuring the origins of illicit funds, highlights ongoing challenges in cryptocurrency regulation and the enforcement of anti-money laundering standards. This incident underscores the urgent need for exchanges to bolster security measures and for continuous enhancement of regulatory frameworks to combat such threats effectively.
Moving Forward
As WazirX continues its recovery process, the cryptocurrency community remains vigilant, watching how the exchange manages the aftermath of one of the largest thefts in its history. The incident not only affects WazirX and its users but also casts a spotlight on the security practices and crisis management of digital asset platforms globally.
For further updates on this situation and its implications for the cryptocurrency industry, stay tuned to our ongoing coverage.
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