The recent hack of Indian crypto exchange WazirX, resulting in the theft of over $235 million, has taken a new turn. The hacker responsible for the breach has managed to transfer approximately $10 million through sanctioned Tornado Cash in the past 24 hours. This alarming development was reported by blockchain security firm Cyvers, shedding light on the criminal’s attempts to hide their tracks and obscure the origin of the stolen funds. Through the use of Tornado Cash, the hacker has managed to launder $10 million in Ethereum (ETH), including deposits of $2 million in ETH, raising concerns about the effectiveness of anti-money laundering measures in the crypto industry.
Analysts have drawn parallels between the WazirX hacker’s laundering tactics and those employed by the North Korea-backed Lazarus Group, known for orchestrating more than $2 billion in crypto thefts. The Lazarus Group is believed to fund North Korean government activities through illicit means, often utilizing Tornado Cash to carry out sophisticated money laundering operations. By hopping chains and mixing transactions, the group manages to evade detection and launder large sums of stolen cryptocurrency with impunity. The resemblance between the WazirX hacker and the Lazarus Group raises concerns about the growing sophistication of cybercriminals and the challenges posed to law enforcement agencies in combating financial crimes in the digital realm.
In the wake of the WazirX hack and the subsequent laundering of stolen funds, users of the exchange have expressed dissatisfaction with the handling of the situation. Despite the exchange’s announcement of an early withdrawal window for users to access 66% of their Indian rupee (INR) token balances, concerns remain about the fate of their remaining holdings. WazirX’s legal team has hinted that users may only be able to recover 55%-57% of their crypto assets, leading to uncertainty and frustration among the exchange’s customer base. The decision to file for restructuring in Singapore further complicates the situation, as users grapple with the prospect of potential losses and the long road to recovery.
The fallout of the WazirX hack has underscored the vulnerabilities of cryptocurrency exchanges and the challenges of combating cybercrime in the digital age. The use of sanctioned services like Tornado Cash to launder stolen funds highlights the need for enhanced security measures and regulatory oversight in the crypto industry. As users navigate the uncertainties surrounding their holdings and the future of WazirX, the incident serves as a stark reminder of the risks inherent in the world of digital assets and the importance of vigilance in safeguarding against malicious actors.
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