CertiK Marks Transfer of Almost $1 Million to Tornado Cash from CoinStats Exploit

Wallets linked to the CoinStats miner recently moved nearly $1 million in Ether to the controversial crypto-mixing protocol Tornado Cash.

The latest development comes less than a week after the leading crypt tracker said investigations are ongoing.

Tornado cash inflow

Blockchain security firm CertiK noted that two wallets associated with CoinStats mining in June transferred 311 ETH, valued at approximately $959,000, to Tornado Cash. One wallet moved 211 ETH, while the other transferred 100 ETH to the crypto mixer.

CoinStats reported a security breach on June 22 that affected iOS users who received a deceptive notification offering a reward. The company quickly suspended its app to contain the breach and confirmed that the attack was managed, affecting only 1.3% of its total portfolios, 1,590 in total. CoinStats also assured users that connected wallets and centralized exchanges (CEX) remained secure.

In a more recent update on July 5, the company said the incident is still under investigation, but did not release further details on whether law enforcement authorities have been involved.

“We are still investigating the June 22 security incident and taking swift and committed action to ensure the security of our new infrastructure. We are working hard to share additional information as soon as we can, including measures to support victims” .

Legal Firestorms by Tornado Cash Devs

Despite facing legal challenges and significant crackdowns, Tornado Cash continues to be widely used to launder stolen funds. In August 2022, the US Treasury Department blacklisted the service, prohibiting its use by US citizens, residents and businesses. The project’s web domain and GitHub accounts were closed.

Later that month, Tornado Cash developer Alexey Pertsev was arrested in Amsterdam on suspicion of involvement in concealing criminal financial flows and facilitating money laundering through the Ethereum mixing service. Pertsev was sentenced last May to 5 years and 4 months in prison.

A few months later, two more Tornado developers, Roman Storm and Roman Semenov, were accused of aiding $1 billion in money laundering. The first was arrested in Washington state.

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