Recently, wallets linked to the CoinStats exploiter have made a significant move by transferring nearly $1 million in Ether into the controversial crypto mixing protocol Tornado Cash. This development has raised eyebrows in the crypto community as investigations are currently underway. CertiK, a blockchain security firm, identified two wallets associated with the June CoinStats exploit moving 311 ETH, amounting to approximately $959,000, into Tornado Cash. One wallet transferred 211 ETH, while the other sent 100 ETH to the crypto mixer.
Security Breach and Swift Response
The security breach reported by CoinStats on June 22nd targeted iOS users who received a misleading notification promising a reward. In response, the company promptly suspended its application to mitigate the breach and confirmed that only 1.3% of their total wallets, specifically 1,590 wallets, were affected. CoinStats reassured users that connected wallets and centralized exchanges remained secure amidst the incident.
Ongoing Investigations and Lack of Information
As of the latest update on July 5th, CoinStats mentioned that the security incident from June 22nd is still under investigation. However, the company did not provide any additional details regarding the involvement of law enforcement authorities. Their statement indicated that they are working diligently to ensure the security of their infrastructure and are committed to sharing more information, including measures to support any victims, at the earliest convenience.
Despite facing legal repercussions and crackdowns, Tornado Cash continues to be widely used for laundering stolen funds. In August 2022, the US Department of the Treasury placed restrictions on the service, prohibiting its utilization by US citizens, residents, and companies. This resulted in the shutdown of Tornado Cash’s web domain and GitHub accounts. Moreover, one of the developers, Alexey Pertsev, was arrested in Amsterdam for allegedly concealing criminal financial flows and facilitating money laundering through the Ethereum mixing service, leading to a prison sentence of 5 years and 4 months.
Subsequently, two more developers of Tornado Cash, Roman Storm, and Roman Semenov, faced charges of aiding $1 billion in money laundering. Roman Storm was arrested in Washington State, adding to the legal troubles surrounding the controversial crypto mixing protocol. These recent events highlight the complex web of illicit financial activities and the ongoing battle against money laundering in the cryptocurrency sector.
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