Ethereum: The Choice for Hackers
Stolen funds from the Indian cryptocurrency exchange WazirX are being converted into ether, a move that experts believe is aimed at preventing authorities from blacklisting these assets. According to data from the analytics platform Spot On Chain, the attackers have favored ETH over other ERC-20 tokens due to its inability to be blacklisted.
Advantages of Ethereum
The Ethereum network’s ERC-20 token standard allows developers to implement mapping functions in smart contracts to maintain a list of blacklisted addresses. This flexibility is lacking in ETH, which does not allow modification of address permissions, thereby preserving its core decentralized and trustless nature. Blockchain security company PeckShield suggests that the quick switch to Ethereum helps hackers protect their funds before authorities or centralized token issuers can take any measures.
One notable example of this strategy being exploited was the April 2020 theft of $25 million from the dForce decentralized finance (DeFi) protocol. By using Ethereum, hackers can avoid the risk of their assets being blacklisted, which would hinder their ability to use the stolen tokens effectively.
Post-attack Scenario
On July 18, the security company Cyvers detected several suspicious transactions from WazirX’s multi-signature wallet to new addresses, confirming an attack that resulted in the theft of $234.9 million worth of various assets. On-chain investigator ZachXBT speculates potential involvement of the North Korea-backed Lazarus Group, citing similarities with past attacks orchestrated by the group. The hack led to a drop in the SHIB token price by more than 9% and a 13% decline in WRX, WazirX’s native token, in the hours following the attack.
As of the latest update, the attackers have converted $201 million worth of stolen assets into Ethereum, exchanging significant amounts of other tokens like Polygon, Pepe, and Shiba Inu for ETH. However, they still have $12 million worth of other tokens available for exchange, indicating ongoing efforts to liquidate the stolen funds.
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