Poloniex Hacker Transfers $3.3M ETH to Tornado Cash

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The Poloniex hacker has transferred $3.3 million worth of ETH to the Tornado Cash mixer after 178 days of inactivity, highlighting ongoing concerns over laundering activities involving the cryptocurrency mixer.

Poloniex Hacker Moves After 178 Days

A hacker responsible for stealing $125 million from Poloniex's hot wallets last November has made a significant move, transferring 1,100 ether (ETH) to the sanctioned coin mixer Tornado Cash. This transfer, worth approximately $3.3 million, occurred in 100 ETH batches on Tuesday after the funds remained dormant for almost six months.

After 178 days of inactivity, the hacker sent 11 batches of 100 ETH each to Tornado Cash, marking a notable development in the ongoing saga of the Poloniex hack. Prior to this recent transfer, the hacker had moved 501 BTC valued at $32 million to an undisclosed wallet on April 30, maintaining a total of $181 million across various blockchains.

Poloniex Hack Recap

In November 2023, Poloniex, a cryptocurrency exchange, was the victim of a major hack, resulting in an estimated loss of around $125 million. Exchange owner Justin Sun confirmed the breach, promising to reimburse affected users and offering a bounty to the hacker, termed a white hat bounty, in exchange for the return of the funds.  

Data provided by Arkham revealed that multiple wallets across various blockchains were targeted. The "Poloniex Hacker" wallet, specifically, sent $114 million worth of tokens from Poloniex over 357 transactions. Additionally, a wallet on the Tron blockchain transferred $42 million to several other wallets.

Tornado Cash's Role

Tornado Cash, a protocol known for obfuscating crypto tokens by mixing assets across multiple wallets over time, has been under scrutiny for being heavily used by the North Korean hacking group Lazarus, which has been behind several crypto exploits in the U.S. 

Most notable of their exploits is the Axie Infinity hack, which resulted in the loss of $625 million worth of crypto funds, all siphoned off with the help of Tornado Cash. This event also prompted the Treasury Department to take action against the mixing tool and impose heavy sanctions on it. 

Furthermore, the authorities recently charged developers Roman Storm and Alexey Pertsev with various offenses, including conspiracy to commit money laundering and operating an unlicensed money-transmitting business. 

Regulators Struggle To Curtail Cybercrimes 

The Lazarus Group’s continued use of Tornado Cash highlights the ongoing battle between regulators and cybercriminals despite heavy sanctions. Recently, crypto investigator ZachXBT uncovered over $200 million in laundered funds by the group, primarily with the assistance of crypto mixers like Tornado Cash, between August 2020 and October 2023.

The recent transfer of $3.3 million worth of ETH to Tornado Cash by the Poloniex hacker underscores the challenges in combating such illicit activities in the crypto space. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

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