Crypto Heist Funds On The Move: Poloniex Hacker Transfers $3.4 Million To Tornado Cash

Reports unveiled that part of the stolen funds from crypto exchange Poloniex have been moved for the first time. After six months, one of the identified accounts where the exploit proceedings were sent in November 2023 transferred $3.5 million to a crypto mixer.

Stolen Funds Transferred For The First Time

On Monday night, one of the labeled addresses holding the stolen assets moved the funds to a US-banned Tornado Cash. The transfers are the first time since the crypto heist that the hacker has moved part of the money to launder it.

Per Wu Blockchain’s report, the Poloniex hacker transferred 100 ETH, worth around $308,000, from address 0x3E…fDFd to the mixer. Later, PeckShieldAlert informed that the address had sent 1,100 ETH, worth nearly $3.5 million, to Tornado Cash.

#PeckShieldAlert #Poloniex hacker- labeled address 0x3e94…3fdfd has transferred 1.11k $ETH (worth ~$3.4m) to #Tornadocash pic.twitter.com/JIDG0pYfUH

— PeckShieldAlert (@PeckShieldAlert) May 7, 2024

In November 2023, the Justin Sun-led Poloniex Exchange suffered a breach of security that saw the theft of $125 million. At the time, blockchain security company PeckShield informed of suspicious activity from the platform’s hot wallets. As a result, Poloniex’s team froze the accounts “for maintenance.”

However, it proved unfruitful as the hackers had already stolen millions of dollars worth of crypto assets from the addresses. According to the reports, the exchange saw losses of $56 million in Ether (ETH), $48 million in TRON (TRX), and $18 million in Bitcoin (BTC). Additionally, assets like Pepe (PEPE) and Magic (MAGIC) were stolen.

Crypto Hacker Ignores Warnings

Tron founder and exchange owner Justin Sun initially offered the hackers a 5% Whitehat reward for returning the crypto assets. Later, Sun raised the offer from approximately $6 million to $10 million, reaching the industry standard of 10%.

Unfortunately, the attackers didn’t take Sun’s offer despite his clear message that the assets would become useless. The Tron founder sent $0.10 worth of ETH to the already-identified wallets where the stolen funds had been sent.

In the message, Sun stated that the addresses had been marked as non-eligible. He also warned investors that trading with the hacker could freeze their accounts.

The Poloniex hack has been attributed to the North Korean hacker group Lazarus Group, which is known for its high-profile attacks. According to CoinGecko data, the exploit caused the centralized exchange to lose significant user trust, with its trust score falling to 5 out of 10 points.

The most recent transfers seem to confirm the funds will never be returned, and a recovery is almost impossible, as stated by Wu Blockchain. The attacker used privacy tools to veil the funds despite being unable to send the crypto assets directly to exchanges.

It’s worth noting that global regulators have misused these tools for criminal purposes as an excuse to crack down and scrutinize the privacy sector. Nonetheless, financial privacy continues to be important for users’ security, and the use of privacy tools can aid in protecting investors.

Ultimately, the increasing number of crypto hacks remains a concern for the community. Over half a billion dollars were stolen by malicious actors from crypto projects during Q1 2024. Despite the significant decrease in April, experts keep urging crypto investors to beware of any suspicious activity and reinforce their security measures.