Stolen 4,064 BTC (Worth $240 Million) Reversed After Failed Privacy Shield Attempt

A theft involving 4,064 BTC has been thwarted, with the stolen funds successfully returned to the original wallet after the hacker’s attempt to shield the assets privately failed, according to a briefing received by Today’s Gazette.

Crypto scam investigator ZachXBT revealed that the hacker tried to obscure the stolen funds by transferring them through various platforms, including ThorChain, eXch, KuCoin, ChangeNow, Railgun, and Avalanche Bridge. In total, 4,064 BTC was moved during these transactions.

According to the Block Explorer receipt, the recipient wallet received four major transfers: 625.00033905 BTC (approximately $36,927,310.87 USD), 2,172.99972454 BTC ($128,388,788.51 USD), 642.37598752 BTC ($37,953,927.87 USD), and 624.00085718 BTC ($36,868,257.82 USD), totaling 4,064.37690829 BTC, valued at around $240,138,284.30 USD. The hacker incurred a minor transaction fee of 0.0000129 BTC during the process.

Responding to ZachXBT’s observation, RAILGUN, a private and anonymous DeFi platform, clarified that since it operates on a permissionless basis, anyone can send tokens into the platform. However, any tokens that fail to generate a Private POI (Proof of Identity) proof cannot enter the privacy set.

“In this case, the tokens in question were unshielded back to the original address and gained no privacy,” the platform stated.

The transferred funds appear to be the proceeds of a breach. A total of 4,064 BTC was stolen from a wallet, with several reports indicating that the funds were taken from a Genesis Trading creditor. Initially, 2,173 BTC was moved years ago, followed by 642.4 BTC in subsequent transactions.

The method used by the hacker remains unclear. The crypto space has seen various hacking incidents, including a significant breach at Binance in 2022. The world’s largest cryptocurrency exchange lost $570 million during that attack, which experts say highlights the vulnerabilities in decentralized technology.

At the time, Chainalysis estimated that around $2 billion worth of cryptocurrency was stolen across different exchanges. This year alone, according to Chainalysis, stolen funds inflows nearly doubled from $857 million to $1.58 billion, with ransomware inflows rising by approximately 2%, from $449.1 million to $459.8 million.

Hackers are now employing increasingly sophisticated strategies, such as IT workers linked to North Korea using off-chain methods like social engineering to infiltrate and steal funds.