Kronos Research hacker starts laundering funds on Tornado Cash

Six months later, those responsible for the $25 million Kronos Research exploit began transferring the stolen funds.

Blockchain security firm PeckSheild flagged the move on May 7, stating that hackers had directed funds to mixing platform Tornadocash.

Tornado Cash is an open-source platform designed to mix crypto funds from multiple sources, making it difficult to trace the origin of assets. The platform, which is often used by bad actors to launder ill-gotten gains, has faced serious criticism from regulators.

While some have touted it as a tool to strengthen user privacy, the U.S. Treasury Department’s Office of Foreign Assets Control imposed sanctions on the use of this tool in August 2022.

Despite the sanctions, the platform continued to be the choice of bad actors, laundering more than half a billion dollars worth of cryptocurrency in 2023 alone.

The platform’s creators were also accused of laundering stolen crypto assets. However, they denied the allegations and moved towards impeachment.

The Kronos Research hacker initially moved 1,314 Ether to a new address starting with 0x8F5e4. At the time of the move, the stash was valued at approximately $4 million.

The funds were then moved to another wallet identified by 0x164A24b. This wallet was then used to initiate 10 transactions for 100 ETH each and the funds were sent to the crypto mixing platform.

Hacker transfers money to Tornado Cash | Source: Pecksheildalert on X

Kronos Research first disclosed this vulnerability on November 18. The attack was confirmed by on-chain researcher ZachXBT, which flagged significant Ether outflows from a linked wallet. It was later discovered that the hackers used stolen API keys to carry out the attack.

The Taiwan-based company also tried to negotiate with the hacker days after the attack took place. A 10% reward was offered on the condition that the remaining 90% of the fund be returned, but to no avail.

There have been numerous attacks in the crypto space since the beginning of 2024. Interestingly, recent reports show a notable decline in the trend; April saw a 67% decrease in crypto thefts compared to March.

Similarly, in March 2024, a 50% decrease in crypto losses due to hacks was recorded compared to February.