The hacker responsible for the recent $235 million exploit of Indian cryptocurrency exchange WazirX has converted nearly $150 million of their loot into Ether (ETH), according to blockchain analytics firms.
This move is likely an attempt to launder the stolen funds, as Ether offers several advantages for criminals.
Why Ether?
Unlike other cryptocurrencies stolen in the attack, such as Shiba Inu (SHIB) and Polygon (MATIC), Ether cannot be frozen or blacklisted. Certain tokens have built-in features that allow issuers to restrict the movement of funds associated with suspicious activity. Ether, however, lacks this functionality.
“Swapping to Ether quickly can help the hacker secure their funds before any preventative measures are taken by authorities or the issuers of centralized tokens,” explained blockchain security firm PeckShield.
Ether’s Laundering Advantages
- Liquidity: Ether is a highly liquid cryptocurrency, making it easier to trade for other assets without significant price fluctuations.
- Resistance to Blacklisting: Unlike some tokens, Ether transactions cannot be directly blacklisted, offering the hacker more freedom in moving the stolen funds.
- Price Stability: Ether’s price is generally more stable compared to other altcoins, minimizing risks associated with price swings during laundering.
Impact of the Hack
The mass conversion of stolen funds to Ether caused a price dip for SHIB, with the meme coin dropping nearly 7%. In contrast, Ether’s price remained relatively stable.
WazirX’s Response
Following the hack, WazirX halted withdrawals and acknowledged the theft, which represents a significant portion of the exchange’s reserves based on their June proof-of-claims report. Despite the setback, WazirX claims to be actively working to recover the stolen funds.
Also Read: WazirX Hack: $235 Million Vanishes from Indian Exchange’s Wallet
Possible Culprits?
While the investigation continues, blockchain forensics firm Elliptic believes North Korean hackers might be behind the attack, citing specific patterns and techniques employed during the exploit.
The Future of WazirX
The significant hack raises concerns about WazirX’s security practices and its ability to recover the stolen funds. The exchange’s reputation and future operations will likely depend on their transparency and effectiveness in resolving this incident.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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