HECO Chain Exploiter Uses Tornado Cash Protocol to Anonymize Massive Ether Transactions
Summary:
Nearly 40,392 Ether (ETH) has been moved and de-identified by a crypto wallet linked to the HECO Chain exploiter, using Tornado Cash crypto-mixing protocol. This move is speculated to make $145.7 million worth stolen Ether hard to trace back. The Tornado Cash protocol, known for laundering illicit funds, has been used by cybercriminals, including North Korea’s Lazarus Group. The protocol had previously faced sanctions from the U.S. Treasury Department.
Close to 40,392 Ether (ETH) - a type of cryptocurrency, has been moved and de-identified by a crypto wallet related to the HECO Chain exploiter. This was done using the Tornado Cash crypto-mixing service in a span of eight days. The exploiter, according to crypto detective agency PeckShield, used the Tornado Cash service to make repeated transactions that make tracing an estimated $145.7 million worth of Ether nearly impossible.
PeckShield details reveal that most of the funds were funnelled into a singular Tornado Cash account. Additionally, one 0.2 ETH transaction, equivalent to around $699, was conducted using a different Tornado Cash account. One significant transaction saw 11,300 ETH, estimated at over $39.5 million, being moved by the exploiter.
Cybercriminals typically use Tornado Cash as a method to mask their stolen funds. This was observed on March 21 when roughly $24 million from a September 2023 Rocket Pool hack was moved there. Additionally, North Korea’s Lazarus Group restarted their use of Tornado Cash to clean funds from their heists on March 13.
The Tornado Cash protocol faced sanctions in August 2022 from the U.S. Treasury Department, blaming it for abetting the laundering of over $1 billion in illegal funds. This includes money connected to the Lazarus Group.
In response to these charges, Roman Storm, co-founder of Tornado Cash, pleaded not guilty in the U.S. District Court for the Southern District of New York in September. He and his alleged accomplice, Roman Semenov, are charged with conspiracy to launder money, violation of sanctions, and operating an unauthorized money-transmission business.
The Arbitrum DAO decided to eliminate a proposal to finance the legal expenses for the founders of Tornado Cash on March 10. As per an Arbitrum representative, the proposal was withdrawn at the writer’s instruction. The reasoning behind this change remains undisclosed. Cointelegraph attempted to get more information on this issue from DK — the anonymous delegate leading the proposal — but received no response.
Published At
3/22/2024 1:15:55 PM
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