- Hackers transferred $12M in ETH from the WazirX breach using Tornado Cash to obscure the transactions.
- WazirX lost 45% of its reserves in the $230M breach, including $100M in SHIB and $52M in ETH.
- WazirX is working with Binance to recover customer funds, with a recovery estimate of 55-57%.
Hackers who stole $230 million from WazirX have moved 5,000 ETH, or roughly $12 million, to a new wallet address. Cyvers Alerts, a blockchain security company, announced the transfer on Tuesday.
Notably, this comes after a serious hack in July that affected the multisig wallet on the exchange and resulted in a sizable loss of cryptocurrency assets. The early Tuesday morning transfer by the hackers signaled a significant change in the flow of the stolen money.
Use of Tornado Cash in Fund Obscuration
Notably, the stolen ETH was transferred into a Tornado Cash router through 16 different transactions. This transaction, which involved almost $4 million in ETH, demonstrates how dangerous actors continue to utilize Tornado Cash.
Additionally, Tornado Cash is a service that allows hackers to hide the movement of cryptocurrency they have stolen by masking transaction trails on blockchain networks. Laundering stolen assets using this method has grown in popularity, especially following high-profile exchange breaches.
A substantial amount of WazirX's reserves were impacted by the hack with about 45% of the exchange's assets being lost. $100 million in Shiba Inu tokens (SHIB) and $52 million in Ethereum were lost in the hack.
Notably, the attack has been connected to the infamous Lazarus Group out of North Korea, which has been charged with using Tornado Cash to launder over $1 billion worth of cryptocurrency that was stolen. The service is still a well-liked tool for hackers even after the US government placed sanctions on it in 2022.
Exchange’s Response and Recovery Efforts
WazirX started a reorganization procedure after the breach to take care of its debts. Although it might not be able to provide all affected customers with cryptocurrency compensation, the exchange still wants to make amends.
Furthermore, customers are likely to retrieve only a portion of their lost assets, according to legal representatives. According to current estimates, there is a 55-77% chance of recovery.
In an effort to comfort users, CEO Nischal Shetty has said that the exchange is actively developing fixes. Shetty recently asked for more time for the platform to address the situation in a post on X. The exchange is still under fire from its user base, though, as they want transparency and responsibility.
Collaboration with Binance and Industry Repercussions
WazirX has contacted Binance, a former partner, in response to the breach, requesting help in paying impacted customers. Binance is one of the biggest and most prominent cryptocurrency exchanges in the world, so its participation in this recovery effort could have a big impact on how things turn out. The result of this partnership may have an effect on the way the industry handles breaches going forward.
Therefore, the WazirX hack highlights how susceptible cryptocurrency exchanges are to more complex cyberattacks. There is an increasing need for improved security measures throughout the industry as hackers continue to take advantage of security flaws and hide money that has been stolen. The industry will probably keep a close eye on this case to determine how it may affect exchange security more broadly.
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