Starting on the afternoon of December 3rd, following unsuccessful negotiations, a hacker swiftly moved over 2,010 ETH from Arbitrum to Ethereum, then sent 1,000 ETH to Tornado Cash through multiple small transactions, each worth 100 ETH, in an attempt to obfuscate the assets.
The estimated hack dispersed more than $6.5 million, with approximately $40 million still remaining in the hacker’s possession.
As previously reported, on the morning of December 23rd, the KyberSwap DEX was unexpectedly attacked in its liquidity pool, resulting in a loss of $47 million. Shortly thereafter, the Kyber team confirmed the hack, made efforts to rectify the situation, and recommended users to withdraw their funds as a precaution against potential vulnerabilities.
Additionally, Kyber attempted to negotiate with the hacker to recover the lost funds. However, instead of complying with Kyber’s proposals, the hacker made a series of audacious demands, including total control of the project.
Unwilling to accept these “unreasonable” terms, Kyber announced that they would use their reserve funds to compensate 100% of the affected users. They also pledged to cooperate with authorities to track down the mastermind and recover the stolen funds.
It’s worth noting that Tornado Cash is an open-source protocol that facilitates private transactions on the Ethereum network. The protocol is built on zero-knowledge proof technology, allowing users to break the links in on-chain transactions and enhance the privacy of transactions between sending and receiving addresses.
Tornado Cash uses standard ERC-20 smart contracts for transactions, and its native token is TORN. Recently, Binance announced that it would delist TORN on December 7, 2023, causing a drop in the token’s price.
In August 2022, the US government added Tornado Cash to its sanctions list, accusing it of aiding money laundering through crypto for various hacker organizations linked to major security breaches in the cryptocurrency industry that caused hundreds of millions of USD in damages. They also issued arrest warrants for two of the project’s founders.