2024

Tornado Cash

Tornado

Bitcoin Token

<h2 class="wp-block-heading" id="introduction-to-the-incident">Introduction to the Incident</h2> 
<p>In a significant security breach dated November 10, 2023, the Poloniex cryptocurrency exchange was compromised, leading to the theft of approximately $125 million in diverse cryptocurrencies. Recent developments have revealed that the hacker has begun the process of transferring some of these assets.</p> 
<h2 class="wp-block-heading" id="first-movements-of-stolen-assets">First Movements of Stolen Assets</h2> 
<p>Technology journalist Colin Wu reports that the hacker has initiated the laundering of stolen funds by sending 100 <a href="https://btc-pulse.com/ethereum/">Ethereum </a>(ETH) to the controversial Tornado Cash mixer, marking a significant development in the case. Despite these movements, a vast sum of $182 million in various cryptocurrencies such as Ethereum, Tron, Bitcoin, and Bitcoin Token remains securely in the hacker’s possession.</p> 
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   <p lang="en" dir="ltr">Today, Poloniex Hacker: 0x3E…fDFd transferred 100 ETH (about $308,000) to Tornado Cash. This is the first time that the Poloniex hacker has transferred money to Tornado Cash for money laundering. Currently, the Poloniex hacker also has $182 million in crypto assets, including…</p>— Wu Blockchain (@WuBlockchain) <a href="https://twitter.com/WuBlockchain/status/1787676480086118439?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">May 7, 2024</a>
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<h2 class="wp-block-heading" id="poloniex-s-response-and-subsequent-developments">Poloniex’s Response and Subsequent Developments</h2> 
<p>Post-attack, Justin Sun, the owner of Poloniex, managed to identify and freeze certain assets linked to the hacker. In a strategic move, Sun offered a $10 million reward for the return of the stolen assets, hoping to recover the losses without further complications.</p> 
<h2 class="wp-block-heading" id="increasing-use-of-crypto-mixers-in-thefts">Increasing Use of Crypto Mixers in Thefts</h2> 
<p>The method observed in the Poloniex <a href="https://btc-pulse.com/curve-finance-rewards-security-researcher-250000/">incident </a>mirrors actions taken in other recent high-profile hacks, such as those at Kronos Research and Hundred Finance. These hackers also channeled stolen funds through Tornado Cash, highlighting a recurring strategy among cybercriminals in the crypto space.</p> 
<h2 class="wp-block-heading" id="detailed-analysis-by-peckshield">Detailed Analysis by PeckShield</h2> 
<p>Blockchain analytics firm <a href="https://twitter.com/PeckShieldAlert/status/1787726644767252886" target="_blank" rel="noopener">PeckShield</a> meticulously traced the hacker’s transactions, starting with a test transfer of $200 worth of ETH. Following the test, a large sum of 1,314 ETH, valued at close to $4 million, was moved to another address, eventually being distributed in multiple transactions of 100 ETH each to Tornado Cash.</p> 
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   <p lang="en" dir="ltr"><a href="https://twitter.com/hashtag/PeckShieldAlert?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#PeckShieldAlert</a> <a href="https://twitter.com/hashtag/KronosResearch?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#KronosResearch</a> Hacker 5: The labeled address has transferred 200 <a href="https://twitter.com/search?q=%24ETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">$ETH</a> to <a href="https://twitter.com/hashtag/Tornadocash?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#Tornadocash</a> and approximately 1,314 <a href="https://twitter.com/search?q=%24ETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">$ETH</a> (worth around $4 million) to a new address 0x164A…D5c4, and started laundering them via <a href="https://twitter.com/hashtag/Tornadocash?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#Tornadocash</a><a href="https://twitter.com/hashtag/KronosResearch?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#KronosResearch</a> was hacked in mid-November… <a href="https://t.co/7YOVuNpebd" target="_blank">pic.twitter.com/7YOVuNpebd</a></p>— PeckShieldAlert (@PeckShieldAlert) <a href="https://twitter.com/PeckShieldAlert/status/1787726644767252886?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">May 7, 2024</a>
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<h2 class="wp-block-heading" id="the-controversy-surrounding-tornado-cash">The Controversy Surrounding Tornado Cash</h2> 
<p>Tornado Cash’s ability to anonymize the source of crypto funds has led to significant scrutiny. This scrutiny culminated in August 2022 when the U.S. government imposed sanctions against the mixer, leading to charges against its developers for alleged involvement in money laundering and sanction violations.</p> 
<h2 class="wp-block-heading" id="conclusion-and-ongoing-implications">Conclusion and Ongoing Implications</h2> 
<p>The initiation of fund transfers by the Poloniex hacker using Tornado Cash highlights enduring challenges in tracking and regulating digital currencies. With a substantial amount of stolen assets still under the hacker’s control, the situation remains fluid and continues to be a focal point for both regulatory authorities and the global cryptocurrency community.</p>

Poloniex Hacker Moves Stolen Funds for First Time, $182M Still Untouched

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