Hackers Stole Over $600 Million In Crypto. Bleaching Is The Most Delicate Part. – Tech Tribune France

Many eyes in the crypto world are glued to a 42-character address on the Ethereum blockchain, whose ownership is unclear and which currently houses the equivalent of around $600 million.

Hackers stole players’ funds from the online game “Axie Infinity” in a March 23 heist uncovered last week. Criminals have moved millions of dollars in assets in recent days, according to blockchain monitoring tools, but the majority of funds remain in place, leaving victims and outside observers waiting for the next moves.

Crypto transparency has turned money laundering into a vicious spectator sport. Transaction records on public blockchains give authorities an overview of stolen funds equivalent to tens or hundreds of millions of dollars, often stolen by targeting poorly secured software bridges that transfer assets between blockchains. blocks.

The openness leaves successful cyber thieves with a key question: how do you launder a nine-figure score?

“When there’s a hack like this, everyone watches the wallets,” said Kimberly Grauer, research director at Chainalysis Inc., a blockchain analytics firm. “So you better know what you’re gonna do.”

The fate of money stolen from users of “Axie Infinity”, one of the largest thefts of its kind, has become a matter of speculation. On Etherscan, a monitoring platform where users can see transactions to and from the address in question, commenters claiming to be victims, broke students or Ukrainian refugees have posted messages asking hackers to spread their newfound wealth.

The Singapore-based developer behind “Axie Infinity,” Sky Mavis Ltd., said it intends to refund or recover the stolen funds. On Wednesday, the company said it had raised $150 million from investors including crypto exchange Binance in a funding round it aims to use to help pay victims.

The individuals behind last month’s heist targeted the Ronin Network, a software bridge developed by Sky Mavis that allows “Axie Infinity” players to transfer earned in-game assets.

Last week, blockchain analysts and amateur digital sleuths saw around $20 million worth of ether migrate to Bahamas and Seychelles-based crypto exchanges. On Monday, another $12 million in assets were poured into a blender, which mixes different cryptocurrencies to help hide their sources.

Mixers can have their own security trade-offs and depend on the availability of enough crypto to exchange illicit deposits for cleaner funds, said Mitchell Amador, chief executive of Immunefi, a bug bounty platform focused on decentralized systems.

“For [$600 million] it would take years with current cash,” he said of the mix. “You have to be very patient to make this kind of investment.”

Governments in the United States and other countries have stepped up law enforcement efforts to seize stolen funds and tightened money laundering regulations for crypto exchanges.

Such efforts make transfers of some Ronin Network funds to exchanges potentially risky, said Jess Symington, head of research at Elliptic Enterprises Ltd., a blockchain analytics firm.

“That could be an opportunity for law enforcement to step in,” she said.

Some victimized companies attempted to pay their hackers in exchange for recovering their cryptocurrency.

After the Qubit Finance app was hit by an $80 million heist in January, the decentralized lending platform publicly offered $2 million “without persecution” for the rest of the funds. It’s unclear if the hackers agreed to the deal, but a crypto address linked to the exploit on Etherscan still holds more than $76 million in funds.

The app’s developers have since said on Twitter that they’ve downsized their team and taken out a loan to help compensate users. Qubit did not respond to requests for comment.

Following a February $320 million hack of the Wormhole Bridge, the investors behind the project said they had returned funds to users in a move that helped stabilize price of the cryptography underlying the applications the bridge helps support. Wormhole then offered a $10 million reward to hackers who spot such vulnerabilities in the future, saying on Twitter that “we think it’s important to keep the good guys motivated.”

While companies such as Sky Mavis may chase bugs more aggressively, individual victims are often forced to watch their money move through blockchains in hopes of it being recovered or refunded in some way or other. another, said Yajin Zhou, co-founder of China-based security firm BlockSec. .

“For users, honestly, there’s not much to do,” he said.

Many call decentralized finance, or DeFi, the “Wild West of finance.” This growing industry aims to provide automated banking services for cryptocurrencies to everyone, without intermediaries. But DeFi is still in its infancy, which means there are risks. WSJ explains. Photo illustration: Tammy Lian/WSJ

Write to David Uberti at [email protected]

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Hackers Stole Over $600 Million In Crypto. Bleaching Is The Most Delicate Part. – Tech Tribune France

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