Hacker transfers $6.5 million in stolen funds from WazirX to US-sanctioned Tornado Cash

The hacker responsible for the $230 million cyberattack on Indian crypto exchange WazirX has begun transferring stolen funds using Tornado Cash, a digital currency mixer sanctioned by the US government.

The measure, which hides the trail of the stolen goods, is the last attempt of the aggressor to launder the ill-gotten gains.

Transfer of $6.5 million in stolen ETH

According to cybersecurity firm PeckShield, approximately 2,600 ethers (ETH), valued at around $6.5 million, were transferred to the sanctioned cryptocurrency mixer early Tuesday.

Additionally, Arkham data reveals that nearly $4 million in ETH was transferred through 16 transactions on the Ethereum network to a Tornado Cash router.

The hacker’s wallet currently has more than $155 million in various tokens, mostly in ETH, valued at around $150 million. Before September 3 they had not moved any of the money.

Tornado Cash is a sanctioned decentralized platform that allows users to exchange tokens while hiding the originating and receiving wallet addresses, making it difficult to track the flow of funds.

While the service itself is not illegal, it has often been used by cybercriminals to obfuscate transactions linked to stolen or illicit cryptocurrencies.

Customers warned of up to 43% losses

This latest fund move comes just weeks after the July 18 cyber attack against WazirX. The incident resulted in the loss of more than $230 million in user assets, a sum that represents more than 45% of the exchange’s total reserves.

Following the default, the Indian bourse has sought restructuring to manage its liabilities, with a request to be heard by the High Court in Singapore on Tuesday. The court will also hear its prayer for six months of protection on the same day, a move intended to give the exchange some breathing room as it navigates the restructuring process.

The request was made by Zettai, a Singapore-incorporated entity whose subsidiary, Zanmai India, operates WazirX. Meanwhile, the company’s legal advisers have warned that clients are unlikely to recover the full amount of their stolen investments.

During a press conference on September 2, Nischal Shetty, co-founder of WazirX, and George Gwee, director of restructuring firm Kroll, said that users could see a return of only 55% to 57% of your money at best. In the worst-case scenario, clients could lose up to 43% of their holdings on the platform.

However, they are reportedly in talks with a “white knight” investor to help close the shortfall and increase the recovered funds.

The representatives also plan to distribute the remaining assets to users on a pro rata basis while exploring the development of new products and profit sharing schemes as additional sources of revenue.

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER on BYDFi Exchange – Up to $2888 Welcome Reward, Use this link to register and open a 100 USDT-M position for free!