Elliptic reports that stolen cryptocurrency from Atomic Wallets is now being funneled through the OFAC-sanctioned Russian exchange, Garantex. This development raises concerns about the movement of illicit funds through a platform subject to international sanctions.
The hacked funds amounting to $35 million from the Atomic Wallet breach are once again in motion, as the illicit funds have reportedly made their way to the sanctioned Russian-based crypto exchange, Garantex. This latest development highlights the continued circulation of the stolen cryptocurrency and raises concerns about its potential impact on the crypto ecosystem.
Blockchain security and compliance firm Elliptic provided an update on June 13 regarding the stolen funds from Atomic Wallet. According to Elliptic, the Lazarus Group, a North Korean hacking collective believed to be responsible for the attack, has allegedly utilized the sanctioned Russian-based crypto exchange Garantex for laundering the stolen funds. This revelation sheds light on the involvement of both the hacking group and the exchange in the illicit activity surrounding the Atomic Wallet breach.
According to a Twitter post by Elliptic, a notable collaborative effort between Elliptic and various exchange partners successfully led to freezing the stolen cryptocurrency. However, the post also mentions that the Lazarus Group has managed to find alternative methods to exchange their assets for Bitcoin (BTC), causing a decline in BTC prices by $25,987. This highlights the ongoing challenges in combating illicit activities within the crypto space and the resourcefulness of malicious actors in finding new avenues for their operations.
After a significant and successful cross-community effort between @elliptic, many of our exchange partners and friends to freeze stolen @AtomicWallet funds, Lazarus have now turned to OFAC-sanctioned Exchange, Garantex, to trade their assets for BTC… pic.twitter.com/5Lk9DeGjr8
— Elliptic Investigations (@Elliptic_Inv) June 12, 2023
Also Read: US Sanctions Watchdog Claims Russia-Linked Crypto Wallet Processed $5 Million
In April 2022, the U.S. Office of Foreign Assets Control (OFAC) imposed sanctions on Garantex, a Russian-based exchange, as well as the Russian Hydra dark web marketplace. The Treasury Department highlighted that Garantex, which was founded in late 2019 and initially registered in Estonia, had subsequently shifted the majority of its operations to Moscow. This move by OFAC aimed to restrict the activities of these entities due to concerns over their involvement in illicit or prohibited activities.
According to the analysis conducted, it has been found that over $100 million in transactions associated with illicit actors and darknet markets are linked to Garantex. These findings shed light on the mechanisms employed by the group to obfuscate the origin of the funds and continue their illicit activities.
According to Elliptic, the funds obtained by the hackers from Garantex are still being concealed through the Sinbad.io mixer. It is noteworthy that the Treasury Department had previously sanctioned Blender.io, which was the previous version of Sinbad.io, in May 2022. The Treasury Department explicitly warned that this service was being exploited by North Korea to facilitate malicious cyber activities and launder stolen virtual currency. These developments underscore the ongoing efforts of illicit actors to leverage mixing services for obscuring the origin of funds and engaging in nefarious activities.
In an unfortunate incident on June 3, multiple user accounts of Atomic Wallet were compromised, leading to losses amounting to approximately $35 million in digital assets. Following the incident, Atomic Wallet enlisted the services of blockchain security and analysis firm Chainalysis to investigate the incident. Notably, the North Korean hacking group, known for its involvement in significant cryptocurrency exploits, has been linked to previous incidents such as the Harmony Bridge hack and the Ronin Bridge hack over the past year.
Also Read: Australian cryptocurrency exchange begins expansion in the US despite concerns about regulation
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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