- Over $35 million from the DMM Bitcoin hack laundered through Huione Guarantee.
- $28.2 million halted by Tether after identifying linked Tron wallet address involved in the hack.
- Japan-based DMM Bitcoin suffered a $305 million loss, part of a broader trend of increasing cyber attacks on exchanges.
A significant amount of cryptocurrency stolen in a May hack from Japan-based exchange DMM Bitcoin has been laundered through a Cambodian marketplace linked to the nation’s ruling family. Over $35 million of the stolen funds have been processed through Huione Guarantee this month alone, according to cryptocurrency analyst ZachXBT and blockchain forensics firm Elliptic.
Details of the Laundering Operation
The laundering operation involves complex movements across multiple digital platforms. Initially, the hackers deposited the stolen Bitcoin into privacy mixers, a technique used to obscure the origin of funds. From there, the Bitcoin was converted into different cryptocurrencies including Ethereum and Avalanche, utilizing the cross-chain liquidity protocol THORChain.
Following these conversions, the funds were changed into USDT (Tether) and moved to the Tron network, before being directed to Huione Guarantee. However, a significant portion of these transactions was disrupted when Tether blocked a key Tron wallet address involved in the laundering process on July 12. This intervention prevented $28.2 million from reaching the Cambodian exchange.
Increasing Cyber Threats to Crypto Exchanges
This incident is part of a worrying trend of rising attacks on centralized cryptocurrency exchanges. Over the past year, such platforms have witnessed a 900% increase in losses due to cyber attacks, with over $1.4 billion in cryptocurrencies stolen in 2024 alone, as reported by blockchain security firm Cyvers. The recent hack of DMM Bitcoin, resulting in a loss of $305 million, highlights the vulnerabilities these platforms face.
In response to the breach, DMM Bitcoin managed to secure $320 million shortly after the incident to compensate affected users, showcasing the ongoing challenges and financial implications of security breaches within the cryptocurrency sector.
The increase in cyber attacks has been noted by industry experts as reflecting a shift in criminal focus towards centralized exchanges, which have become lucrative targets for sophisticated cybercriminal groups like the Lazarus Group, suspected to be behind the DMM Bitcoin hack. This trend emphasizes the growing need for enhanced security measures and regulatory scrutiny within the digital currency space to protect assets against increasingly elaborate cyber threats.
