Perpetrator Behind Kronos Research's $25M Exploit Begins Moving Funds
Summary:
Nearly six months after a major $25 million exploit from Kronos Research, the perpetrator has begun moving the stolen funds. The hacker initially transferred around $4 million worth of Ether (ETH) to a new wallet before making several transactions to a crypto-mixing tool, Tornado Cash. This move, according to crypto analytics firm PeckShield, indicates an attempt at laundering the stolen funds. The use of such tools for illegal purposes previously led the US government to sanction Tornado Cash and charge its creators for money laundering.
After nearly six months, the perpetrator behind the substantial loss of $25 million suffered by quantitative trading company Kronos Research in mid-November of last year has begun to mobilise the funds. Initially, the hacker's wallet relocated 1,314 Ether (ETH), valued at $4 million, to a fresh address that begins with 0x8F5e4, before channeling all the ETH to a different address beginning with 0x164A24b, according to sources from PeckShield. From the final wallet, the hacker proceeded to make ten transactions, each containing 100 ETH, transferring it to a cryptocurrency mixing tool named Tornado Cash, as recorded on Etherscan.
Tornado Cash is a free source crypto tumbler that functions on systems that are compatible with the Ethereum Virtual Machine. Such mixing services are designed to obscure the origins of the crypto transactions, making it exceedingly hard to trace back to the initial source of the funds. However, while they were originally developed to protect privacy, these mixing services have been increasingly used by cybercriminals to conceal stolen funds through decentralized exchange platforms. In response to the illegal use of Tornado Cash, the United States government enforced sanctions in August 2022. This was then followed by charges against its creators for money laundering and sanctions offenses a year later.
Across the cryptocurrency community, opinions vary widely in relation to the adoption of privacy tools. However, there is a shared consensus against the prosecution of developers by the government for merely creating an application. Crypto analytics company PeckShield issued a warning regarding the funds transfer, advising caution as the move to Tornado Cash could be an indicator that the hacker is attempting to clean up the stolen funds.
It's become common for hackers to select crypto-mixing services rather than centralized exchanges as, once discovered, their addresses get blocked by exchanges. Kronos Research fell victim to an attack in November 2023 when the hacker(s) gained access to the firm’s API keys. Initially, Kronos denied any fund losses, but an eventual revelation by on-chain investigator ZachXBT outlined the theft and transfer of around 12,800 ETH or $25 million into six distinct cryptocurrency wallet addresses. This led Kronos to temporarily suspend its trading services to fully investigate the loss.
Published At
5/7/2024 10:50:20 AM
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