The WazirX Hack: A Trail of ETH Leads to Tornado Cash
In July 2024, WazirX, one of India’s leading cryptocurrency exchanges, fell victim to a cyberattack resulting in the theft of over $230 million, primarily in Ethereum (ETH) and Shiba Inu (SHIB).
On September 3, 2024, the hacker behind this monumental heist moved approximately $6.5 million worth of ETH through Tornado Cash, a mixer notorious for anonymizing cryptocurrency transactions. WazirX has indicated that full recovery of the stolen funds is unlikely, with users potentially recovering between 55% to 57% of their lost assets.
The Hack’s Aftermath
The breach at WazirX not only shook the Indian crypto community but also highlighted the vulnerabilities within the crypto exchange sector.
Following the hack, WazirX implemented a 66% limit on Indian Rupee (INR) withdrawals, aiming to stabilize the platform’s liquidity.
The exchange has engaged with law enforcement and filed legal documents in the High Court of Singapore, seeking avenues for recovery and justice.
Why Tornado Cash?
Tornado Cash, despite being sanctioned by the U.S. Treasury for its role in laundering over $7 billion in virtual currency, remains operational in various jurisdictions.
By funneling ETH through Tornado Cash, the hacker effectively obscures the transaction trail, making it nearly impossible for blockchain analysts to trace the funds back to identifiable wallets.
This move not only complicates recovery efforts but also underscores the challenges in regulating cryptocurrencies across borders.
- According to blockchain analytics firm Arkham Intelligence, the WazirX hacker carried out 26 transactions, each transferring 100 ETH to Tornado Cash, showcasing a systematic approach to laundering the stolen funds.
Looking Ahead
The platform is undergoing restructuring, aiming to clear liabilities and regain user trust. They’ve also started allowing withdrawals, albeit limited.
While technology offers anonymity and freedom, it also presents challenges in security and recovery. As WazirX and its users navigate this crisis, the broader implications for cryptocurrency security and regulation are being closely watched.
© Cryptopress. For informational purposes only, not offered as advice of any kind.
