Nearly six months after the $25 million exploit of quantitative trading firm Kronos Research in mid-November 2023, the hacker began transferring funds.
The hacker wallet initiated the movement by transferring 1,314 Ether (ETH) valued at $4 million to a new address, starting with 0x8F5e4. Subsequently, all the ETH was transferred to another address beginning with 0x164A24b.
The hacker conducted ten transactions of 100 ETH each from the final wallet, sending them to Tornado Cash, a crypto-mixing tool. Tornado Cash obscures the transaction path, making it difficult to trace the source of funds, although it has faced scrutiny for facilitating illicit activities.
The significant usage of Tornado Cash for transferring illicit funds led to the United States government imposing sanctions on its use in August 2022. Despite this, there’s a consensus within the crypto community against state persecution of developers for creating privacy tools.
Crypto analytics firm PeckShield raised an alert regarding the fund transfer, indicating that the use of Tornado Cash suggests an attempt to launder stolen funds.
Exploiters often prefer crypto-mixing services over centralized exchanges, as exchanges can block identified addresses once the exploit is discovered.
Kronos Capital experienced the exploit in November 2023 after the exploiters gained access to the firm’s application programming interface keys. Initially, Kronos denied any loss of funds but later revealed that approximately 12,800 ETH, worth $25 million, had been stolen and transferred to six unique crypto wallet addresses. As a result, Kronos Capital halted its trading services to investigate the loss.
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