Poloniex Hacker Transfers $3.3M ETH to Tornado Cash

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As a seasoned crypto investor, I’ve witnessed my fair share of hacks and scams in this space. The recent news of the Poloniex hacker moving their stolen ETH to Tornado Cash is deeply concerning for me and many others in the community.

A hacker on Poloniex exchange moved nearly $3.3 million in Ethereum to the Tornado Cash tumbler following a 178-day pause, raising red flags regarding potential money laundering transactions linked to this mixing service.

Poloniex Hacker Moves After 178 Days

As a crypto investor following the Poloniex hack from last November, I’ve been keeping an eye on the latest developments. The hacker responsible for stealing $125 million from the exchange’s hot wallets has made a noteworthy move recently. They transferred 1,100 ether (ETH), equivalent to around $3.3 million, to the sanctioned coin mixer Tornado Cash. This transaction took place in batches of 100 ETH on Tuesday, after the funds had been dormant for nearly six months.

After a 178-day long pause, the unidentified hacker initiated 11 transactions, sending 100 ETH (approximately $332,000) in each batch to Tornado Cash. This unexpected move adds a significant twist to the ongoing Poloniex hack case. Prior to this transaction, the hacker had transferred 501 BTC ($32 million at that time) to an unknown wallet on April 30, accumulating a total of $181 million across multiple blockchains.

Poloniex Hack Recap

In November 2023, Poloniex, a well-known cryptocurrency trading platform, experienced a significant cyberattack leading to an approximate loss of $125 million. The platform’s proprietor, Justin Sun, acknowledged the incident and vowed to compensate affected users. Additionally, he put forth a white hat bounty, encouraging the hacker to return the stolen funds.

Based on information from Arkham, it was discovered that numerous wallets spanning different blockchains were subjected to attacks. Notably, the “Poloniex Hacker” wallet, which is identified as such, moved approximately $114 million in tokens from Poloniex through 357 transactions. Furthermore, a Tron blockchain wallet shifted $42 million among several other wallets.

Tornado Cash’s Role

Tornado Cash, a cryptocurrency protocol that obscures tokens by blending funds from various wallets over an extended period, is drawing attention for reportedly being utilized extensively by the notorious North Korean hacking gang Lazarus. This group is believed to be responsible for numerous crypto heists in the United States.

As a seasoned analyst, I would put forth that the most newsworthy incident involving them is the Axie Infinity heist, during which an astonishing $625 million in cryptocurrency was stolen. This grand larceny was facilitated through the use of Tornado Cash, a mixing tool that effectively concealed the trail of these ill-gotten funds. The aftermath of this event saw the Treasury Department taking decisive action against Tornado Cash, imposing stringent sanctions on it.

Recently, Roman Storm and Alexey Pertsev, two developers, have been indicted by the authorities for alleged crimes such as money laundering conspiracies and running an unauthorized money transmitting business.

Regulators Struggle To Curtail Cybercrimes 

The persistent employment of Tornado Cash by the Lazarus Group showcases the unyielding struggle between regulatory authorities and cybercriminals, notwithstanding stringent penalties. Notably, crypto detective ZachXBT has exposed approximately $200 million worth of ill-gotten gains by this group, predominantly through the utilization of cryptocurrency tumblers such as Tornado Cash, from August 2020 to October 2023.

As a researcher studying the crypto market, I’ve recently noticed an intriguing development: a transaction valued at approximately $3.3 million in ETH being transferred to Tornado Cash by the infamous Poloniex hacker. This event serves as a stark reminder of the complexities and challenges we face when trying to combat illicit activities within this realm.

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2024-05-07 16:02