A hacker responsible for stealing over $235 million from the Indian cryptocurrency exchange WazirX has recently transferred $6.5 million worth of Ethereum (ETH) through Tornado Cash, a notorious crypto mixer known for laundering illicit funds.
On September 3, blockchain security platform Cyvers reported that the wallet address linked to the WazirX hacker moved 2,600 ETH—valued at $6.5 million at the time—into Tornado Cash in an attempt to obfuscate the stolen assets. The transfer, executed in 26 separate transactions of 100 ETH each, was completed in just one hour, according to data from crypto tracking platform DeBank.
This latest move comes as WazirX announced that it has opened up withdrawals for users ahead of schedule. Initially set for September 9, the exchange began allowing users to withdraw up to 66% of their Indian Rupee (INR) token balances on September 3.
“Starting today, all eligible users can now withdraw up to the full 66% limit of their INR balances,” WazirX confirmed in an X post.
Background of the WazirX Hack
The hack, which took place on July 18, saw the theft of $235 million in cryptocurrency from WazirX, one of India's largest crypto exchanges. Since then, the exchange has been working to restore normal operations, including reinstating withdrawals for its users.
WazirX has taken a cautious approach, citing ongoing investigations with various law enforcement agencies as the reason why 34% of rupee-denominated balances remain frozen. The exchange is also involved in legal proceedings in Singapore as part of its restructuring efforts.
Implications for the Crypto Community
The hacker’s use of Tornado Cash to launder stolen funds raises concerns about the continued use of crypto mixers to evade detection. Tornado Cash has been under scrutiny, especially since it was sanctioned by the U.S. Treasury Department in 2022 for facilitating money laundering activities. The latest incident underscores the challenges faced by regulators and crypto exchanges in tracking and recovering stolen assets.
WazirX’s decision to allow early withdrawals is seen as a proactive measure to restore user confidence and prevent further panic. However, the legal complexities surrounding the remaining frozen assets and ongoing investigations highlight the precarious situation the exchange finds itself in.
As WazirX navigates through these challenges, the broader crypto community is watching closely, particularly as the case may set precedents for how future incidents of this nature are handled.
Source: Coin Tlegraph
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