WazirX Recovery Stalls as Hackers Use Tornado Cash to Launder Funds

Hackers have moved 15,000 ETH (approximately $40 million) through Tornado Cash since Monday night.
WazirX hackers have laundered most of the $230 million stolen, with only $6 million remaining in the main wallet.

Efforts to recover the $230 million stolen in the WazirX crypto exchange hack are facing significant delays as hackers continue laundering funds through the coin mixer Tornado Cash. Currently, only $6 million remains in the hackers’ primary wallet, with most of the funds dispersed across various untraceable wallets.

Since Monday, the hackers have moved approximately 15,000 ETH (worth $40 million) through Tornado Cash, making the recovery process increasingly difficult. This follows the High Court of Singapore granting WazirX a four-month moratorium to restructure its liabilities after the midsummer breach.

According to Arkham Intelligence, the hackers have transferred $57 million worth of assets in the past week. Additionally, they have executed 26 transactions to Tornado Cash addresses, further complicating tracking efforts.

Tornado Cash, a decentralized cryptocurrency mixer, makes it nearly impossible to trace funds by commingling cryptocurrencies. It has handled almost $2 billion in transactions through July 2024, despite being sanctioned by the U.S. Treasury in 2022.

Some analysts suggest North Korea-sponsored Lazarus Group could be responsible for the heist.

Jeremiah O'Connor, CTO of Trugard, stated,

"while significant progress has been made in de-mixing transactions, the recovery of stolen funds remains exceptionally challenging."

Trugard CEO Anoop Nannra added,

“investigators will have a challenging time trying to decipher which of the receiving wallets are actually part of the hack.”

Despite ongoing investigations, the lack of legal recourse and operational challenges mean that many affected users, particularly in India, may never recover their stolen assets. This uncertainty has left victims, both customers and investors, increasingly resigned to their losses.

Edited by Harshajit Sarmah