TempleDAO hacked funds deposited on Tornado Cash

• Hack amounted to 4% of TempleDAO’s assets
• Tornado Cash is a sanctioned entity in the US, meaning individuals there are prohibited from trading the mixer

A hacker exploiting DeFi protocol TempleDAO used sanctioned crypto mixer Tornado Cash to move his stolen funds.

Earlier this month, the yield farming protocol was used for 1,831 ETH (around $2.34 million). All funds have been moved to a new wallet.

Etherscan data shows that around the same amount of Ether was transferred from the hacker’s identified address to a Tornado Cash router on Sunday. The move obscures the destination of the stolen funds. The protocol’s immutable smart contracts are capable of providing privacy to both criminals and legitimate users.

Blockchain investigator PeckShield first noticed the exploit’s use of the crypto mixer.

The transfers started with 0.1 Ether, followed by several more transactions, each worth 100 Ether, within minutes.

Tornado Cash acts as a cryptoasset mixer, making it extremely difficult to trace the exact origin of the funds withdrawn. It was added to the US Treasury Department-sanctioned list of Specially Designated Individuals in August, which bans people in the country from working with the service.

The Treasury Department’s main concern was the mixer’s role in laundering over $455 million worth of crypto assets stolen by North Korean hacking group Lazarus.

Before the TempleDAO exploit, the total locked value of the protocol was around $57 million, according to DeFiLlama. The attack amounted to about 4% of his wealth. Security firm BlockSec said the root cause was insufficient access control to a specific function in the connected Stax Finance smart contract.

October marks the highest number of crypto hacks all year

October has proven to be a record month for hacking activity so far, with $718 million in funds stolen across 11 different DeFi protocols, according to Chainalysis.

The $100M exploit of Binance’s BNB chain and the $112M siphoned from Mango Markets took place in the last two weeks – and the month is only half over.

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• Shalini Nagarayan

  blocks

  reporter

  Shalini is a crypto reporter from Bangalore, India, covering market developments, regulation, market structure and advice from institutional experts. Before Blockworks, she worked as a market reporter at Insider and a correspondent at Reuters News. She holds some bitcoin and ether. Reach them below [email protected]

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