Last Friday, a hacker stole from cryptocurrency exchange KuCoin amounting to $200M, and now he is attempting to launder the money.
The stolen loot was made up of hundreds of different cryptocurrencies, which include Bitcoin, Ethereum, and XRP. Around 150 of these tokens were ERC-20 tokens like Synthetix (SNX). But for cash out, the crook must ultimately trade that all in for fiat currencies, like the dollars.
The hacker has recently sold off trace amounts of Synthetix, the token that powers the eponymous decentralized derivatives platform. But now, the hacker has finally gone for the gold.
According to some reports, a Twitter bot that tracks significant cryptocurrency transactions on the blockchain, the hacker has moved $1.1M Synthetix (SNX) to Uniswap, a decentralized exchange. Since Uniswap is decentralized, the hacker doesn’t have to confirm their individuality, nor can anyone prevent them from trading there.
Coming from Uniswap, the hacker can exchange the funds for Ethereum or other Ethereum-based tokens. Considering that all of these transactions are indelibly recorded on the blockchain, the hacker must then launder the money. An obvious way will be to “mix” the stolen tokens by putting them in software designed to interrupt the origins of transactions.
Getting the total amount, the hacker had moved about $1.1M worth of SNX. The hacker has also moved an enormous amount of million in cryptocurrencies, some of it came from Chainlink to new wallets.
Different smaller crypto projects are concerned that the hacker will dump these funds on the market and then break their economies, invalidating or freezing the hacker’s stolen funds.
It was reported recently that crypto projects froze or have invalidated – about $130M of the tokens. Subsequently, crypto projects prevented the hacker from using another $10-15M of the funds.
Kucoin stated that the hacker had drained its funds by using a leaked key to access the hot wallets. However, the hacker is still at large, and KuCoin has offered bounties amounting up to $100,000 to anyone who provides “valid information” regarding the hack.
Although the crypto projects have stopped much of the hacker’s money in its tracks, that crypto won’t end back up in KuCoin’s wallets. It is still out of the pocket to the tune of about $200M. But then the KuCoin’s CEO, Johnny Lyu, stated in a Livestream on a Saturday that the company has sufficient money to cover the losses and will eventually reimburse anyone who lost the money.