On January 19th, 2023, a hacker using the pseudonym “Raydium” transferred $2.7 million in cryptocurrency to Tornado Cash, a privacy-enhancing tool obscuring funds’ origins.
Raydium Hacker Transfers $2.7 Million
CertiK, a blockchain security firm, has reported that the exploiter of the Raydium protocol sent 1,774.5 Ether, worth around $2.7 million at the time of writing, to the mixer. Furthermore, the security teams from various exchanges are actively combating the efforts of hackers. However, funds continue to flow to the sanctioned cryptocurrency mixer Tornado Cash.
The use of cryptocurrency mixers like Tornado Cash makes it difficult for authorities to trace the stolen funds and potentially recover them. The incident highlights the ongoing security issue in the cryptocurrency industry. This means there is a need for robust measures to protect against fraud and hacking.
This attack follows a similar one made on a decentralized finance (DeFi) protocol built on the Solana blockchain on December 16th, 2022. The hackers were able to gain control of the exchange owner’s account and drain the liquidity provider funds. The funds consisted of various digital assets, including USD Coin (USDC), Wrapped Solana (wSOL), and Raydium (RAY).
Furthermore, the attack also resulted in a loss of $1.00 for the protocol. The hackers could make off with a significant amount of digital assets. This incident highlights the ongoing security issue in the DeFi space hence the importance of robust measures to protect against fraud and hacking.
Attack on Defi Protocol Smart Contracts
After a first examination, the DeFi protocol found a flaw in the decentralized exchange’s smart contracts. The Raydium team devised a scheme to use the decentralized autonomous organization’s treasury to replace lost tokens and recompense people harmed by the exploit.
Tornado Cash’s smart contracts may function indefinitely. However, anybody can use it at any moment. A report by blockchain analysis company Chainalysis underscored that, unlike centralized services, no institution could quickly “turn the plug” on it.
Harmony One Hackers Funds Frozen
On the other hand, the security teams at Huobi and Binance have identified and frozen cash hacked by Harmony One hackers. So far, they have been successful in recovering 121 Bitcoin (BTC), which was worth $2.5 million. As the matter is still pending, Binance CEO Changpeng Zhao is providing updates on the cooperation between the two exchanges.
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.
