As a result of the hack, the exchange lost almost half of its reserves and started a restructuring process

Hackers of the WazirX exchange transferred $4 million in ETH to Tornado Cash

03.09.2024 - 11:05

89

3 min

What’s new? The hackers who hacked the Indian crypto exchange WazirX for $230 million have started transferring funds to Tornado Cash, a crypto mixer on the US sanctions list. According to the Arkham Intelligence platform, they moved almost $4 million in ETH coins in 16 transactions, and in total, the attackers’ address holds over $155 million in various tokens, mostly ETH.

Arkham Intelligence data

What else is known? On July 18, a private key compromise resulted in the withdrawal of $230 million in various tokens, including $100 million in Shiba Inu (SHIB) meme coins, and $52 million in ETH, from the multi-signature exchange’s wallet.

The stolen funds amounted to more than 45% of the total reserves reported by the exchange in its June report, leaving it unable to maintain full collateralization of client assets and suspended operations.

WazirX has since launched a restructuring process wherein it intends to repay funds to clients and raise additional capital to resume operations.

Withdrawals in Indian rupees were launched on August 26, but 34% of the fiat balance has been frozen for the purposes of a criminal investigation in which the exchange is involved. As such, only 66% of the balance can be returned to users.

In terms of cryptocurrency payouts, WazirX’s legal advisors said that customers will be able to recover between 55% and 57% of their funds at best.

The exchange itself has not only reached out to law enforcement but has also launched a bounty program for blockchain analysts to help recover assets.

It is believed that behind the hack is a hacker group from North Korea Lazarus, which the US authorities link to the financing of the government weapons program. Even before sanctions were imposed in August 2022, the group laundered over $1 billion in cryptocurrencies through Tornado Cash.

New York Fed has said the effect of sanctions against Tornado Cash was ambiguous

New York Fed has said the effect of sanctions against Tornado Cash was ambiguous

Analysts have concluded that the service remains a viable privacy tool from a user’s perspective

Read more

Earlier, the OKX exchange began blocking customer accounts for interacting with services from the sanctions lists, in particular with Tornado Cash and the Garantex exchange. Blocking awaits both those who transfer funds from Tornado and Garantex to OKX and those who withdraw assets from OKX to these platforms. To make sure your crypto assets are clean, use AML check.

Subscribe to Getblock Magazine and stay up to date with the latest news from the world of cryptocurrencies and the digital economy