Unizen Hack: $2.16M Moved to Tornado Cash

In A Nutshell

An exploiter associated with the March hack of the decentralized finance (DeFi) protocol Unizen has recently transferred approximately 865.4 Ether, equivalent to $2.16 million, to the cryptocurrency mixing service Tornado Cash. This event marks the first movement of the stolen funds since their theft, sparking increased security concerns within the DeFi community.

Details of the Fund Transfer

On August 7, PeckShield, a blockchain security firm, detected the exploiter’s funds moving to Tornado Cash, a service known for obfuscating the origins of cryptocurrency transactions. The initial transfer consisted of 500,000 Maker Protocol stablecoin Dai, followed by a shift of an additional 1,679,859 Dai to an unknown wallet. Subsequent conversion of these stablecoins into Ether preceded the movement of these funds to Tornado Cash through 26 separate transactions beginning at 5:35 am.

Unizen’s Response to the Hack

Following the hack in March, Unizen took immediate action by announcing a reimbursement plan for affected users. The protocol, spearheaded by CEO Sean Noga, pledged to refund those who lost $750,000 or less, starting the process on March 11. Payments were made in Tether (USDT) or USD Coin (USDC), and for those who suffered more substantial losses, the protocol promised individual case evaluations. Additionally, Unizen’s chief technology officer, Martin Granström, emphasized the company’s commitment to enhancing security measures by collaborating with external security entities and law enforcement to trace the hacker and prevent future incidents.

Our take

The recent movement of stolen Unizen funds to Tornado Cash underscores a persistent challenge within the DeFi sector: safeguarding assets against sophisticated hacks. While Unizen’s proactive steps in reimbursing victims and bolstering security measures are commendable, this incident serves as a stark reminder of the intrinsic risks associated with DeFi platforms. Investors and users must remain vigilant, prioritizing platforms that not only offer innovative financial solutions but also demonstrate a strong commitment to security and transparency. As the DeFi landscape continues to evolve, so too must the strategies to protect it from malicious actors.

Sources

– PeckShield
– Etherscan