A recent cyberattack on the cryptocurrency exchange WazirX has drawn considerable attention due to the extensive nature of the breach and the subsequent actions of the hacker involved. The perpetrator, who stole $235 million from WazirX, has converted approximately $150 million of the stolen altcoins into Ethereum (ETH). This maneuver appears to be a tactic to prevent the funds from being frozen or blacklisted by regulatory bodies or token issuers.
Altcoins Shifted to Ethereum
Blockchain analysis firm Spot On Chain reported that the hacker converted $90.2 million worth of Shiba Inu (SHIB), $10.2 million in Polygon (MATIC), and $7.5 million in Pepe (PEPE) into Ethereum between July 18-19. This conversion amplified the total amount of stolen funds held in ETH from an initial $52 million to $201 million. Experts in blockchain security noted that this conversion serves multiple purposes, notably for avoiding blacklisting, as Ethereum lacks contract functions that could freeze specific addresses.
Additionally, converting the stolen assets to Ethereum might help the hacker secure the funds more swiftly before any intervention by authorities. PeckShield, another blockchain security firm, highlighted that Ethereum’s liquidity and stability make it a preferred choice for laundering through various exchanges and mixer protocols.
Market Repercussions
The market felt the impact of this breach, especially the prices of the affected altcoins. For instance, Shiba Inu (SHIB) saw a price drop of about 7% following the incident, whereas the price of Ethereum remained relatively stable with only a 0.1% decrease. Despite the significant conversion to ETH, Spot On Chain indicated that the hacker still possesses around $12 million in other tokens, including Chromia (CHR), Celer Network (CELR), Frontier (FRONT), and Ooki (OOKI).
Concrete Inferences
- Shifting altcoins to Ethereum can provide a layer of security against blacklisting.
- Ethereum’s stability and liquidity make it a target for laundering stolen funds.
- The incident caused a notable drop in the market prices of the affected altcoins.
- WazirX has suspended all withdrawals as a countermeasure against further breaches.
In response to the attack, WazirX halted all withdrawals on July 18, citing a force majeure event that compromised nearly half of its reserves. The exchange is actively working to recover the stolen assets, including blocking deposits and tracing the relevant wallets. The incident highlights the ongoing vulnerabilities and the need for enhanced security measures in the cryptocurrency exchange industry.
