As a seasoned crypto investor with years of experience under my belt, I’ve seen my fair share of hacks and security breaches in the cryptocurrency space. The latest news about the CoinStats exploit that resulted in the theft of over $9 million worth of Ethereum (ETH) from users’ wallets is a stark reminder of the risks we take when dealing with digital assets.
Two wallets implicated in the CoinStats hack from June have transferred a collective total of 311 ETH to Tornado Cash to conceal their transaction trails. The first wallet moved 211 ETH, while the second wallet sent 100 ETH through the mixer, equating to approximately $959,000 in value.
Crypto mixers like Tornado Cash are used by a wide array of individuals for anonymizing their transactions. It prevents the tracking of the origin of their funds. While these services are praised for lending privacy—a human right—using them may not comply with anti-money laundering regulations in various jurisdictions. That is because individuals and organizations can use it to cover the tracks of their ill-gotten funds, as proven by the CoinStats hacker.
As a crypto investor utilizing the CoinStats platform, I can easily monitor all my digital asset investments in one place by linking both my hardware wallets and centralized exchange (CEX) accounts. Unfortunately, despite the significant benefits this platform offers, it recently fell victim to a cyber attack. The intruder was able to pilfer funds from approximately 1.3% of the total 1590 wallets integrated within CoinStats. To provide some context, only wallets directly connected to the portfolio tracking system were compromised. External wallets and CEX accounts remained secure throughout this incident.
Despite the significant harm inflicted, users endured substantial financial setbacks, with estimated losses totaling in the millions. One particular wallet suffered a loss of approximately $8.7 million. The gravity of this situation was brought to light by Wu Blockchain, a reputable crypto news outlet on X, in their June post: “A wallet linked to Blurr.eth was drained of 3,657 MKR ($8.7 million) and subsequently sold on the platform by the cybercriminal for 2,482 ETH.”
CoinStats temporarily suspended its operations following a cyberattack in late June. The CEO, Narek Gevorgyan, disclosed that the breach resulted from an employee being tricked by hackers into downloading malware onto their work computer. “The evidence points to our AWS infrastructure being compromised, most likely through a social engineering attack on one of our employees,” Gevorgyan explained. The platform resumed its services on July 3 after addressing the identified vulnerabilities.
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2024-07-11 15:37