The Role of Ethereum in the WazirX Hack
Stolen funds from the Indian cryptocurrency exchange WazirX are currently being converted into ether, with experts attributing this strategy to evade potential blacklisting by authorities. Analysis from Spot On Chain shows that the attackers have chosen to prioritize Ethereum (ETH) over other ERC-20 tokens due to its unique advantages.
Advantages of Ethereum in Hack Attempts
The ERC-20 standard enables developers to implement mapping functions within smart contracts, allowing for the upkeep of blacklisted addresses. This feature grants the option to modify the transfer function to cross-reference against this blacklist before executing transactions. In contrast, ETH’s inherent design does not permit alterations to address permissions, ensuring its decentralized and trustless nature.
Blockchain security firm PeckShield concurred, stating, “A quick switch to Ethereum could help hackers protect their funds before authorities or centralized token issuers take any precautions.” This swift action aligns with previous incidents, such as the 2020 theft from the dForce DeFi protocol, which showcased the capacity of ETH to evade blacklisting measures.
Aftermath of the Attack and Speculations
Following the breach detected by WazirX’s security team, Cyvers, revealing a theft of $234.9 million in assets, suspicions arose regarding the involvement of the Lazarus Group, a North Korea-backed cybercriminal organization. Comparisons drawn to their previous modus operandi hint at potential ties to this new attack.
The impact of the hack reverberated through the market, with tokens like SHIB experiencing a 9% decline post-news announcement. Similarly, WazirX’s native token, WRX, witnessed a 13% drop in value shortly after the breach.
Overall, the use of Ethereum in this cybercrime underscores the cryptocurrency’s resilience against blacklisting and its stability compared to other tokens. While $201 million of stolen assets have been converted into ETH, investigators continue to monitor the situation, expecting further developments in the case.
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