Hi Friends,
The Indian Crypto Exchange, WazirX's woes continues with the latest news that, part of the stolen Crypto being moved to Tornado Cash in an effort to liquidate the Crypto into Fiat currency.
We may recall that, WazirX's Multisig Ethereum Wallet was hacked on July 18 to transfer Cryptos including Gala, Pepe and Tether were transferred from WazirX to an account owned by hacker and were converted into Ethereum to get those liquidated.
According to an estimate, Cryptos worth $234.9 million of funds were moved out of Multi signature wallet owned by WazirX and hacker so far kept the Cryptos in his account, but, as the news of allowing Indians to withdraw part of their money in Indian Rupee can be withdrawn, the hacker has made a move to get the Crypto converted to Fiat by transferring the money to Tornado Cash.
What is Tornado Cash?
Tornado Cash is a Web3 non custodial open source Crypto currency mixing service, where, the Crypto transactions will be mixed with other Crypto transactions so as to remove the tracing back to the sender and potentially, it will be difficult to trace the Transaction details.
Tornado Cash allows the users to transfer the Crypto through multiple smart contracts in multiple quantities from same account and then the same can be transferred to another account by providing a Cryptographic proof such as Zero Knowledge Proof which eventually breaks the links between the sender and receiver and thus makes it literally not possible to trace back the details of the transactions.
More details on Zero Knowledge Proof:
Zero Knowledge Proof or Zero Knowledge Protocol is something, where in, the parties which are trying to get the money transferred (say like sender and receiver) will have to agree upon a coded sentence and the same needs to be proved without any other information being discussed.
So, it's as much as like convey the sentence and have the transaction done or just forget about it.
In simple, One has to possess the piece of information to reveal it to the other party.
Coming back to the WazirX hacking of Cryptos, the money stolen is now in danger of not getting back as the Cryptos are transferred to other account by hacker and WazirX, which had promised a withdrawal of 66% of the money in Indian Rupee from 26th August as remaining 34% seems to be frozen due to ongoing investigation and now the customers have to wait and see how they are going to get their full money back.
Another Update today:
To add to the confusion already the WazirX users have, there are news of even more reduced amount will be available for the withdrawal as another website says the users will get only 55 to 57% of funds as the remaining 47% may not be recovered from the hackers.
Whatever it is, the sufferers are the customers who deposit their hard earned money into these kind of exchanges in the hope of buying Crypto and make some profit, but ended up on losing side due to this hacking and we need to take it as a lesson and Exchanges need to be more stringent with the security of the system they use for the transactions.
Thanks for going through this, please do drop your comments with what do you say on this.
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