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Crypto hack

Wintermute: Everything to know about the $160M exploit

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Wintermute: Everything to know about the $160M exploit

U.K. based crypto market maker Wintermute became the victim of a hack earlier on 20 September. Wintermute CEO Evgeny Gaevoy informed users on Twitter about the exploit on the platform’s DeFi operations, which has led to a loss of about $160 million.

“If you have a MM agreement with Wintermute, your funds are safe. There will be a disruption in our services today and potentially for the next few days and will get back to normal after” Gaevoy warned users as his firm scrambled to get a grip on the situation. 

Data from Etherscan showed that the perpetrator made away with more than $61 million in USD Coin (USDC), $29.4 million worth of Tether (USDT), and 671 wrapped Bitcoin (wBTC) worth more than $13 million, among several other tokens worth millions of dollars. 

A word from the CEO

Evgeny Gaevoy has assured users that in spite of the massive exploit, the company had twice the amount lost, left in equity, putting to rest any concerns over solvency. As per his statement, Wintermute’s estimated remaining equity should be north of $320 million. 

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The CEO added that a token sell-off was unlikely, given that the hack was spread over 90 assets, and the maximum concentration of the exploit on an asset did not exceed $2.5 million, with only two affected assets exploited to the tune of over $1 million. He also clarified that CeFi and OTC operations were not affected by the hack.

Gaevoy gave creditors of the Wintermute the option to “recall” loans if they had concerns about the liquidity or solvency of the company.

The CEO has not dismissed the possibility of the hack being the actions of white hat hackers who often identify technical vulnerabilities in exchange for a bounty/ portion of the loot. Well, he has urged the attacker to “get in touch.”

Twitter’s response

Users on Twitter soon mobilized to gather whatever information they could regarding the hack. Popular on-chain sleuth @ZachXBT soon published the hacker’s wallet address, which showed $47.8 million in the wallet, while the remaining $114.3 million were stored on the Curve Protocol. 

Crypto enthusiasts on Twitter have come up with a theory behind the hack. Twitter user @0xtuba explained how Wintermute’s address had seven leading zeroes and described it as a “vanity address”. Such addresses are considered vulnerable.

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The user cited fellow crypto influencer @K06a who had previously estimated that a brute force attack on such an address would be possible in 50 days using 1000 graphics processing units (GPUs). 

Given that such processing power was easily available to miners, users believe it is possible that since Ethereum has abandoned the proof-of-stake consensus model, miners have unutilized processing power that is now being used for malicious purposes.

Earlier this year in June, Wintermute took the fall for a “serious error” when it lost 20 million optimism governance tokens meant to facilitate Ethereum scaling solution Optimism’s airdrop. 

A technological lapse saw Wintermute trying to receive the loan in a wallet address that relied on Ethereum layer-1 multi-signature technology, while Optimism runs as a layer-2.

A hacker took advantage of said lapse and was able to transfer the 20 million tokens, although he/she was only able to liquidate about a million of them.

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Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot’s writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S – There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

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Crypto hack

Transit Swap: Decoding the curious case of lost-and-partially found

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Transit Swap: Decoding the curious case of lost-and-partially found

On 1 October, 2022, Transit Swap, was the latest victim of a hack wherein the organization lost $23 million. However, within 24 hours of the attack, the DEX aggregator received 70% of the stolen $23 million. This was due to a swift response from many blockchain security firms.

The DEX aggregator lost the funds on 1 October after the hacker took advantage of an internal flaw in a swap contract. The Transit Finance team and security firms Peckshield, SlowMist, Bitrace, and TokenPocket responded quickly. Together, these organizations were able to identify the hacker’s IP address, email address, and associated-on-chain addresses.

The events of the day

Less than 24 hours after the hack, Transit Finance reported that “through combined efforts of all parties,” the hacker returned 70% of the stolen funds to two addresses. This came up to a total of $16.2 million recovered from the hacker. 

According to BscScan and EtherScan, these monies were distributed as 3,180 Ethereum [ETH] worth $4.2 million, 1,500 Binance-Peg ETH worth $2 million, and 50,000 Binance Coin [BNB] worth $14.2 million.

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📢📢📢Updates about TransitFinance
1/5 We are here to update the latest news about TransitFinance Hacking Event. With the joint efforts of all parties, the hacker has returned about 70% of the stolen assets to the following two addresses:

— Transit Swap | Transit Buy | NFT (@TransitFinance) October 2, 2022

In its most recent update, Transit Finance stated that it was dedicated to retrieving the remaining 30% of the stolen funds.

“The project team is rushing to collect the specific data of the stolen customers and design a detailed return strategy.”

The hunt for the hacker

In addition to SlowMist, Bitrace, and TokenPocket, Peckshield joined the hunt for the hacker. According to Transit Swap, they had a tonne of trustworthy information, including the hacker’s IP, email address, and relevant on-chain addresses.

Furthermore, as of 3 October, the security companies and project teams of all parties are still keeping tabs on the hacking incident. Attempts to communicate with the hacker via email and on-chain methods are also underway. The team further promised to keep working hard to locate the rest of the stolen assets.

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Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot’s writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S – There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

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Crypto hack

Cryptojacking cases on rise; here’s everything you need to know

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Cryptojacking cases on rise; here’s everything you need to know

The year 2022 has been extremely challenging for the cryptocurrency market. The king coin along with its contemporaries has faced major bearish hurdles.

Despite declining prices of digital assets, cryptojacking has increased to record levels in the first half of 2022.

Global cryptojacking volumes have increased by $66.7 million. The rate of cryptojacking is 30% up as compared to Q1 and Q2 of 2021.

This is according to a mid-year update on cyber threats from American cybersecurity company SonicWall.

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In cryptojacking assaults, hackers employ malware to enter computer networks, and take advantage of that computational power to mine cryptocurrencies. However, the aforementioned process most often entails spending a lot of money on expensive, cutting-edge equipment, and using a lot of electricity.

According to SonicWall, the banking sector was subject to five times more cryptojacking attacks as compared to the retail section. As more financial institutions shift their apps to the cloud, hackers are infecting corporate computers and other devices with malware or breaking into networks using Wi-Fi.

Deciphering reasons

According to the survey, there are a few reasons for the general increase in cryptojacking.

To begin with, hackers are using the Log4j vulnerability to launch attacks in the cloud. A serious flaw in the Apache-managed Open Source Library that affects Java-based logging utilities was found in December 2021. It can be used by hackers to obtain remote access to a system.

Secondly, upon comparing cryptojacking with ransomware, the latter requires public dissemination to be successful. Cryptojacking, on the other hand, is a lower-risk attack. The victims of cryptojacking frequently aren’t aware that their networks or PCs have been hacked. The report also stated,

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“Unlike ransomware, which announces its presence and relies heavily on communication with victims, cryptojacking can succeed without the victim ever being aware of it. And for some cybercriminals feeling the heat, the lower risk is worth sacrificing a potentially higher payday.”

Are the numbers ever dropping?

SonicWall did observe some positive indicators. The second quarter saw the number of cryptojacking attacks witness a drop by more than 50% to 21.6 million from the previous three months.

According to the survey, this tendency does, however, follow a usual seasonal pattern, with attacks declining in the second and third quarters before increasing in the last three months of the year.

Aashna is a news editor with AMBCrypto and is particularly interested in the how and what of blockchain technology, along with its vast applications. A flair for the language and her inquisitive nature are factors that spike her interest in the cryptocurrency space.

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Chainalysis

Mixer usage reaches ATH as YTD volume doubles as compared to 2021: Chainanalysis report

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Mixer usage reaches ATH as YTD volume doubles as compared to 2021: Chainanalysis report

The use of cryptocurrency mixers has been at the helm of crypto investigators and compliance officials. This use of mixers has reached an unfortunate all-time high recently as per the latest reports. In fact, more than 10% of all funds sent from illicit addresses are sent to mixers!

According to a recent report by Chainalysis, mixer usage hit an all-time high in 2022. This is a growing concern in the crypto community with such mixers already attracting attention in recent high-profile attacks. The lack of KYC authentication makes the use of mixers very attractive to criminal activities.

Alarming highs!

The Lazarus group, based in North Korea, has often used mixing techniques to launder the stolen funds. As covered in an earlier report, the group was framed for the $100 million attack on the Harmony Bridge. The group has reportedly stolen funds totaling over $2 billion as per Elliptic’s analysis.

Chainalysis data affirms the growing threat of mixers in their latest report. The 30-day MA daily value received by mixers reached an ATH of $51.8 million as of 19 April. These figures have nearly doubled in their YTD volume from 2021.

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Source: Chainalysis

Despite the widespread usage in crime, mixers aren’t considered as illegal tools. Interestingly, the Financial Crimes Enforcement Network (FinCEN) has claimed that these mixers are money transmitters under the Bank Secrecy Act. However, in 2021, the Department of Justice arrested and charged the operator of Bitcoin Fog on multiple counts. The charges included involvement in money laundering, operating an unlicensed money transmitting business, and money transmission without a license.

The breakup of funds received by mixers from illicit addresses is suggestive of an unfortunate growing trend. Illicit addresses account for 23% of funds sent to mixers so far in 2022, up from 12% in 2021.

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Source: Chainalysis

What’s more concerning is the growing use of mixers by sanctioned addresses, especially in 2022. Russian based-entity, Hydra, leads in this category while accounting for over 50% of funds moving in mixers. Next comes the recently covered Lazarus Group with a share of over 30% of funds sent into mixers. Third, we have Blender.io which is another North Korean-based entity at 18.8%.

A word of safety

The report concluded that mixers pose a money laundering threat to the broader global markets with increasing use.

“We encourage stakeholders in both the private and public sectors to work together on how to address the risks associated with mixers…”

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Kanav is a journalist at AMBCrypto. He has a Masters in Media and International Conflict and is interested in areas of digital society, crypto developments in the political sphere and the socio-cultural impact of a crypto-society.

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