Binance retrieves $5.8m from Axie Infinity hack

Binance has confirmed that it has been able to recover $5.8m of the stolen funds, a week after another embarrassing hack.

It follows shortly after the US Treasury Department managed to pinpoint the recent $600m hacking of Axie Infinity and the Ronin software bridge to Lazarus, a North Korean criminal organization that has been linked to extortion and ransomware throughout the world.

Binance used a tip by the US Treasury Department to trace a transaction from one of the culprits to Tornado Cash, which is a mixer service where stolen funds may be exchanged into other tokens in a bid to obfuscate the illegal origins of the service.

Binance CEO Changpeng Zhao (CZ) explained the process that the company used to ensure that the funds were retrieved.

“We coordinated with industry leading blockchain analytics firms and immediately froze the funds when exposure to our platform was identified”, he said.

Perpetrators are smart and try to cover their tracks, but the fact that Binance was able to return the hot funds in the process gives some reasons for optimism as companies may one day be able to retrieve stolen funds.

The case of a New York couple that laid low and waited for years before cashing out, but was only caught then, is indicative of how hard it is to use stolen cryptocurrencies, because authorities would instantly know.

The US Secret Service confirmed in a recent statement that they have seized $102m in illegal funds since 2015 simply by tracking the way stolen cryptocurrencies are moved on the blockchain.

Some $170m from the Axie Infinity hack have already been moved around as hackers are trying to hide their tracks, but as US Secret Service agent David Smith explained, nothing is ever lost on the blockchain. Binance’s ability to retrieve some of the stolen money is an example of that.

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Updated: 04/25/2022 — 09:00