More than half of the $100 million worth of Ethereum (ETH) has been withdrawn

More than half of the $100 million worth of Ethereum (ETH) linked to the infamous Poloniex hack has been withdrawn as of November 2023 via the Tornado Cash privacy protocol.

On November 10, 2023, wallets belonging to cryptocurrency exchange Poloniex recorded massive unauthorized outflows. Investigations later confirmed that over $100 million in ETH was lost due to the hack.

Although Poloniex claimed to have identified the hacker weeks later and offered a $10 million reward, the stolen funds never returned to the exchange. According to blockchain security firm CertiK, the incident likely was a “private key compromise.”

In response to the suspicious outflows, the exchange temporarily disabled the compromised wallet.

On-chain message from Poloniex to the hacker. Source: Peak Shield

Six months later, it became clear that the Poloniex hacker had no intention of returning the stolen funds. Blockchain investigation firm PeckShield found that more than half of the stolen items were transferred via Tornado Cash, a protocol used to anonymize assets.

Poloniex hacker transfers stolen funds to Tornado Cash wallet. Source: Peak Shield

The hacker transferred more than 17,800 ETH from six different wallets to a single Tornado Cash address, as shown in the flowchart above. At the time of the transfer, the value of the tokens was approximately $53.3 million.

Related: BAIC Finance cashed in $1.6 million in the second incident in 3 days

Poloniex soon resumed operations despite the $100 million setback, enabling investors to deposit and withdraw cryptocurrencies at will.

The exchange has appointed a “top-tier security audit firm” to enhance the security of funds on Poloniex and avoid such hacks in the future. on time. The company had said:

“Currently, they are in the final stages of Poloniex’s security audits and verification processes. Upon completion of the audit, we will immediately resume deposit and withdrawal services on our platform.

Poloniex owner Justin Sun – who acquired the exchange in 2019 – has promised to fully compensate users affected by the hack, claiming that Poloniex “maintains a sound financial position” and is looking to cooperate with other exchanges to recover lost funds.

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