Binance Blocks Upbit Hackers’ Attempt to Launder Stolen Funds
Binance has frozen funds linked to the $49 million breach of the Upbit crypto exchange after hackers tried to launder some of the stolen funds.
Most of the action took place on Twitter. At just after 16:00 UTC on May 13, bot Twitter account Whale Alert warned Binance — which has previously committed to freezing any funds related to the hack — that around 137 Ether (worth around $27,000 at the time of writing) had moved from an address related to the Upbit hacker group to its wallets.
Binance CEO Changpeng “CZ” Zhao tweeted soon after that the funds had been successfully frozen and would be returned to Upbit shortly. The time between hackers transferring the Ether to Binance and the exchange blocking it was little more than half an hour.
Gone are the days when hackers could simply walk off into the sunset with their loot, as did the person who stole 850,000 Bitcoin from Mt.Gox in 2014. Wallet addresses related to suspected hackers are now tagged, and exchanges usually freeze any funds coming form these wallets when they show up on their servers.
In January 2019. Binance also froze funds linked to the $16 million Cryptopia hack.
Of course, it is still possible to launder funds. Something around 2,650 Ether (worth approximately $725,000) has left the wallet related to the Upbit hack in the past 24 hours, much of it passing quickly through other wallets, likely to obfuscate the digital paper trail.
A report released by security company Uppsala earlier this year pointed out that the Upbit hackers may have already laundered as much as $3.2 million worth of Ether through exchanges, including Binance and Bitfinex, by only selling tiny amounts each time to avoid any red flags.
It’s not clear what the hackers’ motivation was for sending $27,000 worth of Ether to Binance on May 13. In the grand scheme of things, it’s a relatively small amount since they managed to steal $49 million in total last November. One theory is that they might have been testing the exchange’s response times to see if larger amounts might slip through unnoticed.