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- KuCoin Hackers have already sold almost $20 Million worth of funds from around $281 Million worth hacked funds
- he hour after the hack, the thief attempted to sell some of the exchanges at two regular exchanges
- As the laundering route was essentially blocked, the hackers started to sell the tokens on DEXs for Ethereum
According to a recent report from Elliptic, blockchain monitoring service provider, it is found that the KuCoin Hackers have already sold almost $20 Million worth of funds from around $281 Million worth hacked funds, through Decentralized Exchanges (DEX).
The hacker had to face a challenge on how to sell the stolen tokens
According to some analysts, it was disclosed that, the hour after the hack, the thief attempted to sell some of the exchanges at two regular exchanges(where you can open an account and trade one digital asset for another). However, as some of the tokens were not censorship-resistant, unlike BTC, their organizations could freeze them, and so the laundering route was soon blocked.
After the registered hack, some organisations have started to freeze balances, allowing KuCoin to retrieve the stolen assets. The exchanges used blockchain monitoring tools such as Elliptic, to identify whether the deposited assets originated from the hack or not, so they can freeze any account receiving such funds.
Only way of hackers to sell stolen tokens
The hacker used its only route through the DEXs or Decentralized Exchanges, to exchange its stolen tokens. DEXs are smart contracts, where you can trade one crypto asset for another, that too without identifying themselves through KYC procedure. It is also observed that DEXs activity on Ethereum has exploded throughout the last few months. As the laundering route was essentially blocked, the hackers started to sell the tokens on DEXs for Ethereum.
It was the only way the hacker could have swapped the stolen tokens, and got freed from the risk of being frozen. However, doing this the hacker cannot hide the money trail. Centralised exchanges, which have some loopholes when it comes to tracing the flow, there with DEXs everything stays recorded and visible on the blockchain.
As per the reports, around $17.1 Million have already been swapped by the hacker until 31st September, at Five DEXs.
Tracking of the stolen funds are still live
It is known that the money trails of the hacker can still be recognized on the DEX network, as Elliptic blockchain monitoring solutions are still able to trace the funds. The Elliptic clients receive an alert whenever an incoming transaction originates from the KuCoin hack, via DEX.
With huge volumes and lack of KYC checks, DEXs have become a choice of hackers for money laundering in the crypto world. Though the good part is that the theft of KuCoin revealed that the use of DEXs cannot overcome Elliptic’s tracing capabilities, by which the funds originating from this hack are still being traced.
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With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
