WazirX hacker attempts to clean $6.5 million in Ethereum through Tornado Cash.
The hacker responsible for the July 18 attack on WazirX, India’s largest cryptocurrency exchange, has transferred $6.5 million worth of Ethereum (2,600 ETH) to Tornado Cash, a cryptocurrency mixer criticized for facilitating illicit activities. Tornado Cash is under U.S. sanctions and has been targeted for its role in laundering funds.
The transaction was identified by blockchain security firm PeckShield, which shared the details on their X account, noting the funds were transferred to Tornado Cash within nine hours. PeckShield pointed out that mixers like Tornado Cash make it difficult for security experts to track and recover stolen assets, further raising concerns about their role in crypto scams.
WazirX Attack
On July 18, WazirX suffered a major breach, resulting in the theft of over $230 million in cryptocurrency, with the majority in Ethereum. The stolen funds were quickly dispersed into different wallets by the hacker to avoid detection. The attack exploited WazirX’s multi-signature wallets, which are maintained in partnership with Linea. The incident has sparked tensions between WazirX and Linea, as both parties blame each other for the breach.
WazirX reported that the hack significantly impacted its ability to maintain balanced collateral against its assets, putting additional pressure on the exchange.
Social Loss Strategy
In response to the breach, WazirX attempted to implement a “social loss strategy,” which aimed to distribute the loss among its clients to mitigate the overall impact. However, this plan faced backlash from the exchange’s users, who argued they should not bear the burden of the platform’s security failure. After much debate between the WazirX founder and the community on X, the proposal was abandoned.
Current Status
WazirX halted trading on July 21 as it focuses on partial recovery of the stolen assets. The team has announced that users may not recover the full value of their cryptocurrency holdings. In an effort to recover the stolen funds, WazirX has offered a 10% bounty to any ethical hacker who successfully assists in retrieving the assets.
