Poloniex's Lost Funds Never Made it Back

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Hey folks.

Using the Tornado Cash privacy protocol, more than half $100 million worth of Ether connected to the infamous Poloniex attack in November 2023 has been drained.

On November 10, 2023 wallets on the crypto exchange Poloniex experienced large scale unauthorized outflows. Later, investigations confirmed that over $100 million worth of Ether was stolen by a hacker.

Despite the claims Poloniex put forward about the hacker being identified weeks later and offering a prize of $10 million, the funds that were stolen never made it back to the exchange.

Blockchain security firm CertiK shared that the incident was likely a "private key compromise".

The exchange temporarily disabled the compromised wallet in response to the suspicious outflows.

However, after the lapse of six months, it became evident that the hacker had no intention of returning the stolen funds. PeckShield, a blockchain investigative firm, discovered that over 50% of the wealth was diverted using Tornado Cash, a system that serves to anonymize assets.

Source: PeckShield

Over 17,800 ETH was moved from six different wallets to a single Tornado Cash address by the hacker.

Despite the $100 million setback, Poloniex quickly resumed operations, allowing investors to deposit and withdraw cryptocurrency as needed.

A "top-tier security auditing firm" was hired by the exchange to improve Poloniex's financial security and stave off future attacks of this kind.

Justin Sun, the owner of Poloniex who acquired it in 2019 had promised to completely compensate the users affected by the hack, asserting that Poloniex the exchange maintains a healthy financial position and is looking for cooperation with other exchanges to recover the funds lost.

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Posted Using InLeo Alpha

Posted Using InLeo Alpha