HECO Chain exploiter anonymizes $145M of Ether on Tornado Cash in 8 days

How Do Hackers Launder Their Loot?

The recent transfer of nearly 40,000 Ether (ETH) through Tornado Cash, a crypto-mixing protocol, has raised questions about how hackers launder their ill-gotten gains.

Hiding the Trail of Stolen Funds

According to crypto investigator PeckShield, the HECO Chain exploiter made 19 transfers to Tornado Cash addresses, effectively anonymizing approximately $145.7 million worth of stolen ETH. The majority of the funds were sent to a single Tornado Cash address, with a smaller transaction sent separately to another address.

Crypto Hackers' Preferred Anonymity Tool

Crypto hackers frequently use Tornado Cash to hide the ownership of their stolen funds. The protocol allows users to mix their ETH with other users' funds, making it difficult to trace the original source of the funds.

North Korean Hackers Join the Mix

In March, crypto analytics firm Elliptic reported that hackers from North Korea's Lazarus Group resumed using Tornado Cash to launder funds stolen from hacks. The Lazarus Group has been linked to several high-profile cyberattacks, including the $625 million Axie Infinity hack in March 2022.

Tornado Cash Under Fire

The Tornado Cash protocol has come under fire for its alleged role in facilitating money laundering. In August 2022, the United States Treasury Department sanctioned Tornado Cash, alleging that it had laundered over $1 billion in illicit funds.

Co-Founder Pleads Not Guilty

Roman Storm, the co-founder of Tornado Cash, pleaded not guilty to charges of conspiracy to commit money laundering and other crimes in September 2023. His alleged co-conspirator, Roman Semenov, faces similar charges.

Arbitrum DAO Rejects Funding Request

In March, the Arbitrum DAO rejected a proposal to fund the legal defense costs of the Tornado Cash co-founders. The proposal was later deleted at the author's request, leaving the reasons for its withdrawal unclear.