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Poloniex Hack: Over Half of Stolen Ether Siphoned Through Tornado Cash, Leaving Trail of Anonymity

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In a shocking revelation, it has been discovered that over half of the $100 million worth of Ether stolen in the infamous Poloniex hack from November 2023 has been siphoned through the privacy protocol Tornado Cash. The hack, which occurred on November 10, 2023, saw massive unauthorized outflows from wallets belonging to the crypto exchange Poloniex.

Despite Poloniex claiming to have identified the hacker and offering a $10 million bounty, the stolen funds never made it back to the exchange. According to blockchain security firm CertiK, the incident was likely a “private key compromise.”

In response to the suspicious outflows, Poloniex temporarily disabled the compromised wallet. However, it has now been revealed that the hacker had no intention of returning the stolen funds. Instead, they used Tornado Cash to anonymize the assets.

According to blockchain investigation firm PeckShield, the hacker moved over 17,800 ETH from six different wallets into a single Tornado Cash address. At the time of transfer, the tokens were worth approximately $53.3 million.

The hack has left many wondering how the hacker was able to siphon off such a large amount of Ether without being detected. The incident has also raised concerns about the security of crypto exchanges and the need for stronger measures to prevent such hacks in the future.

In response to the hack, Poloniex resumed operations shortly after, enabling investors to deposit and withdraw crypto at will. The exchange also appointed a “top-tier security auditing firm” to enhance the security of funds on Poloniex and avoid such hacks in the future.

Poloniex owner Justin Sun, who acquired the exchange in 2019, had promised to fully reimburse the users affected by the breach, claiming that Poloniex “maintains a healthy financial position” and is looking for collaborations with other exchanges to recover the lost funds.

The incident serves as a stark reminder of the importance of security in the crypto space and the need for exchanges to prioritize the safety of their users’ assets.

Source: Cointelegraph

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