Hackers Laundered $49.3 Million in Ethereum During First Week of September via Tornado Cash
In early September, four hackers collectively laundered $49.3 million worth of Ethereum through the controversial crypto mixer Tornado Cash. These hackers were involved in breaches targeting crypto exchange WazirX, DeFi protocols Penpie and LiFi, and crypto entrepreneur Bo Shen.
According to on-chain data, between September 1 and 7, a total of 20,561 ETH was funneled through Tornado Cash, which has been banned due to its use in laundering illicit funds. The laundering activities significantly impacted the price of Ethereum, causing it to drop below $2,200, adding to existing challenges the cryptocurrency is facing.
On-Chain Activity of the Hackers Although all four hackers used Ethereum, they employed different laundering strategies. The Penpie hacker moved 11,261.2 ETH (approximately $26.72 million) in one go through Tornado Cash, clearly establishing themselves as a black-hat hacker. In response, Penpie has offered a 10% bounty to anyone who can help recover the stolen funds.
Interestingly, the Penpie hacker received encouragement from the same address that stole $193 million from Euler Finance in March 2023 but later returned the funds. The address urged the Penpie hacker not to return the stolen assets.
In contrast, the WazirX hacker adopted a more cautious approach, laundering assets slowly. This hacker has not yet moved all the stolen assets, partly due to the large sum involved. The breach of WazirX, India’s largest exchange, saw $230 million worth of ERC-20 tokens stolen.
Ethereum Price Impact The hacking incidents and subsequent sell pressure have caused Ethereum to be the 18th worst-performing asset over the past 30 days. Ethereum has dropped 13% in value during the first week of September, coinciding with the laundering of $49.3 million by the hackers.
Key Points to Note Tornado Cash, banned in the U.S., has become a favored tool for malicious actors in the crypto space. Despite the ban, the mixer processed $1.8 billion in the first half of the year, demonstrating the ban’s limited effectiveness. Meanwhile, WazirX has offered a 10% bounty to any white-hat hacker who can assist in recovering the stolen assets.
