Lazarus Group Takes $12M From HTX, HECO Hack to Tornado Cash

North Korea's Lazarus group continues to use Tornado Cash to launder the money stolen from the hack despite sanctions against the crypto mixer.

According to the chain's activity, named by the analytics firm Elliptic, hackers from the Alazarus group transferred $12 million worth of cryptocurrency to Tornado wallets starting March 13. The money was stolen from crypto exchange HTX and cross-chain bridge HTX Eco Chain in November. or HECO.

Hot wallets on the HTX exchange were hacked for $30 million in an attack on November 22, while HECO Chain was hacked for $86.6 million on the same day. The funds were converted to Ether (ETH) on a decentralized exchange and were dormant until this week.

Tornado Cash is a decentralized and decentralized privacy tool built on the Ethereum blockchain. The crypto mixer uses smart contracts to receive ETH and ERC-20 tokens from one address and withdraw them from another address.

The protocol was implicated by the US Treasury Department in August 2022 as allowing the laundering of more than $1 billion in illicit funds, including money linked to the Lazarus group.

“Tornado Cash continues to operate despite sanctions. Mixer is powered by smart contracts that run on decentralized blockchains, so it cannot be captured and shut down the way centralized mixers like Sinbad.io used to be,” Elliptic explained.

The Lazarus team turned to Tornado Cash after running out of other mixing options. According to Ellipte, the hackers have chosen cross-chain bridges and Bitcoin mixer Sinbad to launder the stolen funds since the sanctions.

However, Sinbad has ruled out another option for hackers to join after US sanctions take effect in November 2023, according to Finnish officials. The crackdown on US crypto mixers also includes shutting down the Blender platform in May 2022.

Authorities are also targeting developers of such hybrids. Tornado Cash founders Roman Storm and Alexey Persev have been indicted by US authorities on multiple charges, including conspiracy to commit money laundering, conspiracy to commit sanctions violations and conspiracy to operate an unauthorized money transmitter business. The founder of crypto mixer Bitcoin Fog was also charged with money laundering on March 12.

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