Over Half of Stolen Ether from 2023 Poloniex Hack Traced to Tornado Cash
Summary:
The infamous Poloniex hack in November 2023 saw over $100 million worth of Ether (ETH) stolen. Blockchain forensics firms confirmed that more than half of the misappropriated funds have been funnelled via privacy protocol Tornado Cash. Despite a setback of $100 million, Poloniex resumed operations and pledged to improve security measures. Justin Sun, the owner of Poloniex, claimed a commitment to fully compensate affected users.
More than 50% of the Ether (ETH) valued at $100 million, stolen in the well-known Poloniex exchange hacking incident in November 2023, has been funnelled through the privacy protocol Tornado Cash. Unauthorised massive transfers were detected from Poloniex crypto exchange wallets on November 10, 2023. Subsequent probes confirmed that over $100 million in ETH was stolen in a hacking incident. Although Poloniex said it had pinpointed the hacker within a few weeks and put forward a $10 million reward, the misappropriated funds never returned to the platform. According to blockchain security organisation, CertiK, a "private key compromise" was likely the cause of this breach. Responding to the questionable transfers, the affected wallet was temporarily deactivated by the exchange.
Half a year following the event, it was apparent that the individual responsible for the Poloniex hack had no plans to give back the pilfered money. Blockchain forensics company, PeckShield, discovered that over half of the stolen funds had been transferred via Tornado Cash, a mechanism known for its anonymous asset transactions.
The culprit consolidated over 17,800 ETH from six different wallets into one Tornado Cash account, as the flowchart clearly shows. These tokens were valued around $53.3 million at the time of relocation.
Despite suffering a loss of $100 million, Poloniex swiftly recommenced operations, restoring the ability for investors to deposit and withdraw cryptocurrencies. The exchange appointed a "top-tier security audit firm" to strengthen its fund security and prevent future hacks.
Poloniex's owner, Justin Sun, who procured the exchange in 2019, vowed to compensate all users affected by the security breach fully. Sun asserted that Poloniex "maintains a solid financial state" and is exploring partnerships with other exchanges to recoup the missing funds.
Published At
5/14/2024 11:02:49 AM
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