In a recent development, the hacker group responsible for stealing over $230 million from Indian cryptocurrency exchange WazirX has begun moving the stolen assets using Tornado Cash, a service that allows for the anonymization of transactions on various blockchains. This move started early Tuesday and is a strategic attempt by the hackers to obscure the trail of the stolen funds, making it difficult for authorities to track them.

Tornado Cash itself is a tool designed to help users maintain privacy by allowing them to exchange cryptocurrencies while masking their wallet addresses. While the service is not inherently illegal, it has gained notoriety for being frequently used by cybercriminals to “clean” or launder stolen funds, thereby erasing any online evidence that could be used to identify them.

Data from Arkham, a blockchain analysis firm, revealed that the hackers moved nearly $4 million worth of Ether (ETH) through 16 transactions on the Ethereum network to a Tornado Cash router. The implicated wallet, which holds over $155 million in various cryptocurrencies—$150 million of which is in Ether—had not previously moved any funds to Tornado Cash, signaling a new phase in the laundering process.

The breach that led to this theft occurred in July when WazirX’s multisig wallets were compromised, resulting in the loss of over $100 million in Shiba Inu (SHIB) and $52 million in Ether, among other assets. The stolen assets represented over 45% of the total reserves reported by WazirX as of June 2024. The exchange has since filed for restructuring to manage its liabilities.

WazirX’s legal team has indicated that customers are unlikely to recover the full value of their lost assets, with the best possible outcome being a recovery of between 55% and 57% of the stolen funds. The North Korean hacking group known as Lazarus is suspected of being behind this attack. This group has previously laundered over $1 billion in stolen cryptocurrency through Tornado Cash before the U.S. Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on the service in 2022.

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