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WazirX Hacker Sends $6.5M To Tornado Cash!

Writer's picture: Blockonome GnomeBlockonome Gnome

The hacker responsible for one of India's largest crypto thefts begins laundering funds through Tornado Cash, complicating recovery efforts.


WazirX Hacker Sends $6.5M To Tornado Cash!

The hacker who executed a $230 million breach on Indian cryptocurrency exchange WazirX in July 2023 has started moving stolen funds through Tornado Cash, a cryptocurrency mixing service. On September 3, 2024, blockchain security firm PeckShield reported that the attacker transferred 2,600 ETH—valued at approximately $6.5 million—into Tornado Cash, which has been sanctioned by U.S. authorities for its role in money laundering activities.


The hacker carried out 26 separate transactions, each transferring 100 ETH to the mixing service, which obscures the origin of cryptocurrency by blending multiple transactions together. This development raises significant concerns about the potential recovery of the stolen assets, especially given the sophisticated nature of the laundering techniques employed.


The breach, which took place on July 18, 2023, targeted a multi-signature wallet belonging to WazirX, resulting in one of the largest cryptocurrency thefts in India's history. The stolen assets included over $100 million in Shiba Inu (SHIB) tokens and $52 million in Ether (ETH), among other cryptocurrencies, amounting to more than 45% of the exchange’s total reserves as of June 2024.


In the wake of the hack, WazirX imposed a 66% withdrawal limit on users’ Indian rupee balances. The exchange has also sought legal protection by filing for a six-month moratorium with the High Court of Singapore, aiming to restructure its liabilities through its holding company, Zettai.


During a recent town hall meeting, Jason Karachi, managing director at Kroll, highlighted the challenges faced by the exchange in recovering the stolen funds. He stated, “It’s highly unlikely there can be a recovery in crypto terms, at 100%. The present numbers indicate a range of 52%-57% in crypto terms.” This revelation has left many investors disappointed, as it suggests significant losses despite ongoing recovery efforts.


In a bid to offer some relief to its users, WazirX announced on September 3 that it would allow users to withdraw up to 66% of their Indian rupee token balances from the platform, nearly a week earlier than initially planned. However, the remaining 34% of rupee-denominated balances are currently “frozen” due to ongoing investigations by law enforcement agencies, complicating the situation further.


The attack on WazirX is suspected to have been carried out by Lazarus, a North Korean hacking group notorious for its involvement in large-scale cybercrime. Lazarus has reportedly laundered over $1 billion in stolen funds through Tornado Cash, which has been under sanctions from the U.S. Office of Foreign Assets Control (OFAC) since 2022.


As WazirX continues its restructuring process, trading on the platform is expected to resume once creditors approve the restructuring proposal and the court gives its sanction. However, the road to recovery remains uncertain, particularly as the hacker continues to leverage sophisticated laundering techniques to obscure the trail of the stolen funds.


photo source / Blockonome

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Blockonome's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.

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