A hacker responsible for exploiting vulnerabilities in the Indian cryptocurrency exchange WazirX has reportedly laundered $10 million through Tornado Cash, a decentralised crypto transaction privacy solution. This incident has heightened concerns over the security of crypto exchanges and the ongoing challenges of tracking illicit activities within the decentralised financial system of the crypto world.
WazirX & Hack Attack
WazirX, one of India’s largest cryptocurrency exchanges, confirmed the security breach last month when its users noticed unusual activity on their accounts. The hacker reportedly exploited a vulnerability in the platform’s withdrawal system, gaining unauthorised access to users’ wallets. Although WazirX claims to have limited the damage through immediate countermeasures, approximately $10 million worth of cryptocurrencies were lost, but later deep investigations found that the incident resulted in a $230 million loss.
The stolen funds included Bitcoin (BTC), Ethereum (ETH), and various altcoins. WazirX, working alongside cybersecurity experts, initiated an investigation to trace the funds and attempted to freeze accounts on other platforms where the funds may have been moved.
Tornado Cash: A Best Tool for Crypto Laundering?
Tornado Cash is a crypto transactions privacy tool based on the Ethereum blockchain network. This platform allows Crypto users to send Crypto assets anonymously by mixing their transactions with others before withdrawal.
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While Crypto devs designed the Tornado Cash platform to enhance privacy in a space where transparency is often at odds with security, it has increasingly become a tool for hackers to launder stolen funds.
In this case, the hacker used Tornado Cash to obscure the $10 million worth of stolen assets. The platform’s mixing service makes it challenging to trace the origins of these funds, frustrating law enforcement efforts to recover the stolen assets.
Tornado Cash is a fully decentralised protocol, meaning no central authority can be compelled to reverse transactions or cooperate with investigators.
Read also: American CFTC Body Fines Uniswap Labs $175,000 for Illegal Retail Commodity Trading
WazirX Hacker Successfully Launders $10 Million Through Tornado Cash
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