The masterminds behind the recent $6 million hack on decentralized finance protocol Lendhub have just directed more than half of their illicit proceeds from January into blacklisted crypto mixer Tornado Cash.
$6 Million Was Stolen From Lendhub
On February 27th, blockchain security specialists PeckShield and Beosin warned their respective followers about the movement of funds connected to the Lendhub hack. Apparently, an astounding 2,415 Ethereum (worth around $3.85 million) was transferred from an associated wallet into Tornado Cash! Prior reports indicated that this attack had been one of the most high-profile hacks in January, with a total sum stolen amounting to roughly $6 million – making it clear why these experts needed alert investors against further losses.
Beosin, an on-chain intelligence firm, tweeted that since January 13th, the Lendhub hacker has sent a staggering 3,515.4 Ethereum (valued at more than $5.7 million) to Tornado Cash! This movement marks yet another immense transaction in the crypto space.
Tornado Cash Is a Service That Is Frequently Used by Hackers
On August 8th, the United States Office of Foreign Assets Control (OFAC) imposed sanctions on Tornado Cash — a crypto mixing service that anonymizes Ethereum transactions by combining immense amounts of Ether prior to transferring funds to other addresses. Though its website was taken down due to the sanctioning, it’s still operational as it is housed in an immutable smart contract on an incorruptible blockchain. Thus, users can still take advantage of Tornado Cash’s services even with these punishments in place and its site removed from public access.
According to a January report by Chainalysis, hacks, and scams were responsible for around 34% of all inflows into the mixer – at times reaching as high as $25 million per day. However, after sanctions were enacted, this figure plummeted by 68%. Despite these efforts to cleanse the crypto-mixer from hackers, on February 20th, an exploiter moved over $1.86 million worth of stolen funds onto Tornado Cash. It’s clear that illicit transactions in the space remain prevalent despite recent measures taken against them.
The North Korean hacker collective, Lazarus Group, is infamous for funneling large amounts of money to crypto-mixing services such as Tornado Cash and Sinbad. A Chainalysis report from the beginning of February asserts that funds stolen by North Koreans are channeled through mixers at a greater rate than those pilfered by other cyber criminals.
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