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- Crypto whale loses $40M in multisig wallet hack and laundering.
- Attackers exploit weak wallet setup, draining millions in stages.
- Forensic experts uncover extensive theft, suspecting early breach in November.
A crypto whale’s multisig wallet has been compromised, leading to the theft of over $40 million. PeckShield, a blockchain security company, claimed that attacks on the wallet started minutes after its formation, and the hacker controlled the private key. The stolen money, initially valued at approximately $27.3 million, was later laundered using Tornado Cash, enabling the transfer of roughly $12.6 million. Moreover, the attacker held approximately 2 million in liquid assets and seized a leveraged long position on Aave.
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Attackers Exploit Weak Wallet Configuration and Launder Funds in Batches
Recent revelations made by Yehor Rudytsia, the leader of the forensic department at Hacken Extractor, suggest that the theft may have been ongoing for some time, with indications that the attack occurred as early as November 4. Rudytsia indicated that the victim had created a multisig wallet, which was instantly handed over to the attacker only six minutes later, prompting suspicions that the attacker had arranged the wallet to initiate his chain of actions in stealing.
The design of the wallet was also a significant fault. Being set to a 1-of-1 system, it took just one signature to approve transactions, which bypasses the basic security mechanism of multisig wallets, which usually demand multiple signatures to authorize transactions. Such an arrangement was an enticing target for the attacker to the wallet itself.
Ongoing Threats and Recommendations for Crypto Security
After the control, the attacker proceeded with a plan of strategic laundering. The attacker deposited 1,000 ETH on a single day (November 4) into Tornado Cash and would transfer smaller amounts to the latter through the end of December. This was a systematic method of enabling the attacker to hold onto the stolen money for a more extended period, making it more difficult to trace. To date, approximately, there is a wallet full of compromised data, with an approximate amount of $25 million in the hands of the attacker.
The attack highlights the importance of robust security measures in managing crypto wallets. According to experts, vulnerabilities such as malware, phishing attacks, and operational security drawbacks were factors that contributed to the attack. To prevent such incidents in the future, experts recommend a method of signing and verifying transactions that are not displayed in the user interface by using cold storage devices.
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