Security company PeckShield observed that the hacker group behind the WazirX hack appears to have moved 2,600 ETH ($6.5 million) to the American-approved cryptocurrency mixer Tornado Cash in order to launder the assets that were taken.
Based on data recorded by Arkham, the attacker transferred about $4 million worth of Ethereum (ETH) in 16 transactions to a Tornado Cash router on the Ethereum network. With the bulk of its holdings in ether ($150 million), the address owns approximately $155 million worth of different tokens and has never before transferred any money to Tornado.
How Does Tornado Cash Operate and What Is It?
In recent times, Tornado Cash has become a well-liked instrument for online criminals who want to move money they have gained via illegal means without leaving any trace. With Tornado Cash, cryptocurrency users may swap tokens on different blockchains while hiding their wallet addresses. Although the tool is not malicious in and of itself, cryptocurrency thieves frequently use it to clear their internet tracks, which may reveal who is moving stolen money. Cybercriminals frequently employ the technique of sending money to a mixer to impede law enforcement’s ability to locate and retrieve stolen cryptocurrency.
WazirX Hacker Uses Tornado Cash to Transfer Millions of Ethereum
The hacker known only as WazirX, who hasn’t been recognized since the July attack, is allegedly relocating the money that was taken. According to information gathered by Arkham Research, the hacker is doing this using the contentious Tornado Cash platform. The hacker appears to have transferred $6.5 million (approximately Rs. 54.5 crores) worth of Ether tokens into Tornado Cash, which is now a sanctioned platform in the US, out of the over $230 million (about Rs. 1,900 crores) that was stolen.
WazirX, a cryptocurrency exchange, said on July 18, 2024, that a significant cyberattack had compromised its multi-signature wallet, causing a loss of more than $230 million.
According to the exchange, the WazirX hack has significantly impacted the platform’s ability to maintain balanced collaterals against its assets.
As a result, the team is currently focused on a partial recovery, leading to the freezing of withdrawals and the suspension of trading since July 21. It is anticipated that the losses from the WazirX hack will be shared among users. Due to ongoing restructuring efforts, customers may not be able to recover the full value of their bitcoin that was stored on the site at the time of the WazirX hack, according to various sources.
Over 45% of the overall reserves reported by the exchange in a June 2024 report were made up of the stolen monies; as a result, the exchange filed for a restructuring procedure to pay off its debts.
The legal counsel for WazirX hack stated on Monday that it is doubtful that consumers will receive their full investment back in cryptocurrency, with a return of between 55% and 57% being the best-case scenario.
And who is the hacker?
Nischal Shetty, a co-founder of WazirX, said that the hacker’s identity is still unknown. Research analysts have previously asserted that this breach may have been carried out by North Korea’s notorious Lazarus Group.
The majority of researchers agree that the pattern is consistent with the Lazarus group. Ultimately, though, the Lazarus gang is not a group that comes out and takes responsibility. Thus, you won’t ever receive a confirmation. One of the top researchers in the field is telling us that the pattern fits precisely. We have some reliable information that suggests that may be the case, Shetty said.
The North Korean Lazarus Group, a well-known state-sponsored hacker group best recognized for high-profile vulnerabilities, including a $600 million hack on the Ronin sidechain in 2022, is thought to be behind this attack.
Last Remarks
The WazirX hack has left a significant impact on both the cryptocurrency exchange and its users, with millions of dollars lost and a long recovery process ahead. The use of Tornado Cash by the hacker to obscure the trail of the stolen Ethereum highlights the challenges of tracking illicit activities in the crypto space.
As WazirX works towards a restructuring plan to repay its users, the future of the platform remains uncertain. Investors and users are understandably frustrated, seeking more clarity and hoping for the best possible outcome. Despite these efforts, the WazirX hack serves as a stark reminder of the vulnerabilities in the cryptocurrency ecosystem and the need for stronger security measures.
