The hacker behind the Poloniex cryptocurrency exchange breach has successfully transferred 100 ETH to the Tornado Cash mixer, marking the first instance of stolen assets being laundered in this manner. Despite this, the hacker still holds $182 million in various cryptocurrencies, including Ethereum (ETH), Tron (TRX), Bitcoin (BTC), and Bitcoin Token (BTCT) in their wallet.
The attack on Poloniex on November 10, 2023, resulted in a loss of nearly $125 million in cryptocurrencies. Following the incident, exchange owner Justin Sun managed to identify and freeze a portion of the assets linked to the hacker’s addresses. In a bold move, Sun offered the hacker a $10 million reward to return the stolen assets.
In a similar fashion, hackers targeting the Kronos Research cryptocurrency platform and the Hundred Finance cross-chain lending protocol have also begun funneling funds through Tornado Cash. PeckShield, an analytics company, reported that the hacker initiated a test transaction with $200 worth of ETH before transferring 1,314 ETH, equivalent to almost $4 million, to a new address. Subsequently, the hacker conducted 10 transactions of 100 ETH each, utilizing Tornado Cash to move the funds.
The total amount sent to Tornado Cash has now reached 3,000 ETH, valued at approximately $3 million. The hack on Kronos Capital in November 2023 was facilitated by attackers gaining access to API keys.
Despite its potential for facilitating the movement of illicitly obtained funds, Tornado Cash has faced sanctions from the U.S. government in August 2022. Developers of the crypto mixer were charged with money laundering and sanctions violations. Recently, the prosecutor’s office has sought a five-year prison sentence for the co-founder of Tornado Cash, Alexey Pertsev, in a case that highlights the ongoing debate between crypto anonymity and regulatory oversight.