After the $620 million attack on the Ronin sidechain of Axie Infinity, a SlowMist researcher tracked money flows to authorized crypto mixers. What did slowmist researcher say about the Axie Infinity hack?
To extract ETH and USDC from the Ronin sidechain, a so-called crypto bridge created to assist Axie Infinity players transfer tokens between blockchains, the attackers utilized stolen private keys.
Hackers broke into the play-to-earn game Axie Infinity on March 23, 2022, and stole 173,600 ETH and 25.5 million USDC. They sent the stolen money to a 42-character address on the Ethereum network.
Large sums of money are difficult to move anonymously on the blockchain because of its publicly available nature. Additionally, mixers must have access to sufficient liquidity to convert illicit funds into legal currency in order to operate at their best.
What did slowmist researcher say about the Axie Infinity hack?
A bug-bounty website called Immunefi claims that it might take mixers years to funnel a nine-figure sum. In order to avoid this, the organization used incremental transactions.
Before delivering the money to Huobi, hackers transferred 6,429 ETH through Tornado Cash. The money was changed into bitcoin at Huobi. More than 5,000 ETH were exchanged on FTX.
The Slowmist researcher claims that after receiving 439 bitcoin from Huobi, they were then mixed together using Blender, a program approved by the American government. The money was transferred by the hacker to addresses that were expressly barred by American sanctions. They then used two decentralized exchanges to convert 113,000 ETH that had been transferred through Tornado Cash to renBTC, a kind of bitcoin that exists on the Ethereum blockchain. The bitcoin blockchain received the renBTC and changed it into BTC.
US Treasury makes an effort to identify mixing services
By aggregating user cash, mixers obscure the relationship between the source and destination of cryptocurrencies, making them a desirable tool for thieves to steal money.
On May 6, 2022, a Friday, the U.S. Blender.io, a bitcoin mixing service thought to be a tool used by North Korean hackers, The Lazarus Group, to launder money for cybercrime, was sanctioned by the Treasury Department. The mixer processed more than $500 million in bitcoin transactions, according to the Treasury Department, and was used in the Axie Infinity attack.
Against August 8, 2022, the agency additionally imposed sanctions on Tornado Cash due to the mixer's disregard for putting in place sufficient measures to deter illegal activities. All Americans who work for firms or personally deal with the mixer are prohibited by the sanctions.
While the Treasury Department asserted that Tornado Cash has laundered over $7 billion since 2019, the co-founder of Elliptic, a blockchain analytics company, believes that the government department is confusing illicit fund flows with legal ones and that it has only been able to identify $1.5 billion in criminal proceeds.
