- They seek to use a distributed exchange to turn their investments into an EOS-like token.
- The hackers are trying to cycle the ETH through multiple wallets.
- A small part of the stolen ether sent to Tokenlon.
The infamous Upbit hackers are testing out a new tactic. They seek to use a distributed exchange to turn their investments into an EOS-like token.
Since late November, on-chain analysts and exchanges have been closely monitoring Upbit’s movement of stolen funds. Since then, the nearly $50 million stolen ether has been on the move. The hackers are trying to cycle the ETH through multiple wallets, as reported earlier. Though, they’re using a completely new strategy now.
A small part of the stolen ether was sent to Tokenlon, a decentralized exchange, as reported earlier today by Whale Alert (@whale alert). Likely as a sample, an EOS-pegged token called VEOS exchanged for the ETH.
If successful, we could see the hackers attempting to use this strategy to disperse further and eventually cash out their holdings.
Earlier this year on November 26th, Upbit itself was a victim of hacking and lost $49 million. An “abnormal transaction” in a couple of minutes resulted in a loss of 342,000 ether.
The exchange said the loss did not come from user funds, and for at least two weeks it has suspended all functions. The amount was transferred from Upbit’s hot wallet. It was the seventh major exchange hack of 2019 and points to deep-seated problems in the ecosystem. It remains among the most massive hacks of 2019.
This time, the hackers are trying to use the lack of oversight on decentralized exchanges to “clean their money.” If successful, we might see ETH converted to EOS-pegged tokens in mass and move to other decentralized exchanges.
Despite receiving significant press from the Upbit hack, it has been difficult to retrieve the funds. Entities do not have real control over decentralized exchanges, potentially opening many new doors for hackers to launder their stolen funds successfully. The fear is that other hackers will be able to learn quickly from this strategy and use it in the future— if proven to work.