Crypto hackers launder $4 million through Tornado Cash amid BTC recovery

Cryptocurrency hackers laundered close to $4 million via cryptocurrency mixer Tornado Cash, according to blockchain security firm Pecksheild. The funds moved were stolen more than three months ago from the decentralized finance protocol Unizen and the Bahrain-based crypto exchange Rain.

On August 7, Pecksheild reported that the wallet address linked to the hack on Rain exchange moved 1,155 ETH worth $2.9 million to the popular cryptocurrency mixing service.

Funds laundered via Tornado cash| Source: PeckShieldAlert

The funds have been moved for the first time since the attack on April 29. Crypto investigator ZachXBT found out that the perpetrator had drained funds from the exchange’s BTC, ETH, SOL, and XRP wallets.

Subsequently, the $14.8 million worth of funds were swapped for BTC and ETH and split into two wallets containing 137.9 BTC and 1,881 ETH. The wallets have been dormant for 43 days.

The attacker still holds  726 ETH and 137.9 BTC, worth approximately $9.5 million as of publication time.

Unizen wallet reactivates

Before the Rain exchange funds, another exploiter labeled address involved in the exploit of defi protocol Unzien moved 865.4 worth approximately $2.16 million to Tornado cash.

Pecksheild reported the move during the first half of August 7, noting that the funds had been laying dormant since March 8. The funds initially started as a 500,000 DAI transaction, shortly followed by a significantly bigger 1,679,859 DAI transaction to an unknown wallet.

The DAI was then swapped for 863.67 Ether and transferred to Tornado Cash. The entire process comprised 26 separate transactions, with the majority of funds being sent in batches of 100 ETH.

The funds had been dormant for 151 days. The March 8 attack stemmed from an “approve issue,” as reported by PeckSheild then. The attacker stole $2.1 million USDT and swapped it for stablecoin DAI, which is most likely to retain value.

Unizen had attempted to offer a 20% bounty but to no avail. A reimbursement program was later funded by the project’s founder, Sean Noga, using his funds.

These transfers come at a time when Bitcoin continues to recover from its six-month low of $49,500 reached on August 5.

Analysts remain divided

According to some analysts, Bitcoin may be on the path to a massive upward rally. 

Analyst CryptoJack pointed out a historical pattern, noting that a similar scenario was observed during the 2020 crash with the onset of COVID-19. At the time, Bitcoin crashed to the $4000 price level before initiating a 1400% price surge over the next 13 months.

Similar sentiments were echoed by an analyst going by the name Titan of Crypto, who observed a 38.2% Fibonacci retracement level for BTC and noted that if BTC can hold the $56,000 mark, the upside momentum is expected to continue.

However, as reported earlier by Invezz, some analysts expect a downward rally towards the $40,000 mark. 

As of now, it is yet to be seen how the recent transfers of the stolen funds impact the price of Bitcoin, which is trading at $56,246, down over 15% since the start of August.

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