Crypto Exchange poloniex’s $100 Million Hack Traced to Tornado Cash

The Poloniex cryptocurrency exchange experienced an attack on November 10, 2023, resulting in losses exceeding $100 million worth of Ether. Despite Poloniex's efforts to recover the stolen funds, including offering a $10 million reward, the hacker remained undetected. The firm, which specializes in blockchain security, attributed the hack to a "private key compromise."

Following the breach, Poloniex placed affected wallets on hold and began investigating them. However, the hacker's intention to return the funds was not realized, leaving Poloniex and its users in a difficult situation. Through extensive investigations, PeckShield discovered that a significant portion of the stolen money, approximately $53 million, was actually transferred back to Tornado Cash. The millions had been laundered through Tornado Cash. The hacker moved about 17,800 ETH from various wallets to one Tornado Cash address, making tracing and withdrawing the funds more challenging.

Despite the crypto-exchange being temporarily shut down, Poloniex continued its operations, allowing investors to deposit and withdraw cryptocurrencies. The exchange was also prepared to take the risk of enhancing security by hiring a leading auditing firm to conduct a comprehensive audit. Following the completion of the audit, the exchange promised to resume deposit and withdrawal services immediately.

Justin Sun, the CEO and founder of Poloniex, TRON, assured users affected by the issue that they would be fully compensated and that Poloniex has a very strong financial condition. Sun also stated that he intends to collaborate with other exchanges to recover the funds that were stolen as a result of the security breach, demonstrating his commitment to addressing the aftermath of the hacking.