A crypto wallet linked to the recent HECO Chain hack has raised alarms in the digital currency space. Over an eight-day period, the wallet conducted a series of transactions to obscure the trail of approximately 40,392 Ethereum, valued at around $145.7 million, utilizing the cryptocurrency mixing service, Tornado Cash. Crypto security firm PeckShield highlighted that the hacker’s actions made the stolen funds nearly impossible to trace after 19 separate transfers to Tornado Cash addresses.
Hacker Makes Significant Ethereum Move
In a notable operation, most of the funds were sent to a single Tornado Cash address, with one small transfer of 0.2 Ethereum, worth $699, directed to another distinct address. The largest transaction in this series saw the hacker move approximately 11,300 Ethereum, equivalent to $39.5 million, in a single transfer.
Subsequent Ethereum Laundering Activities
On March 21, an account connected to a $24 million Rocket Pool hack from September 2023 funneled an additional 3,700 Ethereum to Tornado Cash for similar anonymization purposes. Crypto analytics firm Elliptic reported that North Korea’s Lazarus Group hackers resumed using Tornado Cash on March 13 to launder funds stolen in cyberattacks.
Tornado Cash has been a controversial tool within the crypto industry. In August 2022, the United States Treasury Department sanctioned the protocol, alleging it facilitated the laundering of over $1 billion, including funds connected to the Lazarus Group. Tornado Cash co-founder Roman Storm pleaded not guilty in the Southern District of New York’s Federal Court in September 2023.
Roman Storm, along with co-accused Roman Semenov, faced charges of conspiring to commit money laundering, violating sanctions, and operating an unlicensed money transmitting business. On March 10, Arbitrum DAO withdrew a proposal intended to fund the legal defense of Tornado Cash’s co-founders, which was later deleted at the author’s request.