In a concerning turn of events, the perpetrators behind the $25 million Kronos Research breach have begun laundering the stolen funds, as reported today, May 7th.
PeckShield, a blockchain security firm, has raised alarms over the movement of funds, noting that the hackers are funneling them into Tornado Cash, an open-source platform notorious for obfuscating the origins of cryptocurrency transactions.
Tornado Cash, designed to mix funds from various sources, has faced criticism from regulators for facilitating money laundering activities. Despite sanctions imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control last year, the platform has remained a favored destination for illicit actors, laundering over $500 million in crypto throughout 2023.
The creators of Tornado Cash themselves have faced legal action, accused of aiding in the laundering of stolen cryptocurrency, though they vehemently deny these claims and seek their dismissal.
The laundering process began with the hacker moving 1,314 Ether to a new address, with the stash initially valued at around $4 million. Subsequently, the funds were transferred to another wallet and split into 10 transactions of 100 ETH each, ultimately ending up on the Tornado Cash platform.
The Kronos Research breach, disclosed on November 18th, was initially confirmed by blockchain investigator ZachXBT, who detected unusual Ether outflows from a connected wallet. It was later revealed that the hackers had exploited stolen API keys to execute the attack.
In an attempt to recover the stolen assets, Kronos Research reached out to the hacker shortly after the breach, offering a 10% bounty in exchange for the return of the remaining 90% of the funds. However, these negotiations proved fruitless.
Despite the concerning rise in cryptocurrency-related attacks since the beginning of 2024, recent reports indicate a glimmer of hope, with April witnessing a significant 67% decrease in crypto thefts compared to March. Similarly, March 2024 recorded a 50% drop in crypto losses due to hacks compared to February, signaling a potential downturn in the trend of cyber thefts in the crypto space.
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