Nowhere to Hide for Ronin Network Hackers

The year 2022 has witnessed a significant rise in DeFi hacks, with the Ronin Network breach in March being one of the most notorious attacks which resulted in the heist of 173,600 ETH and $25.5 million USDC, collectively worth over $600 million as of the time the attack occurred.

Ronin Network is a gaming-centric Ethereum sidechain built for Axie Infinity.

Blockchain data analysis and forensic enterprise Chainalysis announced that their investigation into the Ronin Network attack -- with the collaboration of other leading cryptocurrency organizations and law enforcement agencies -- has facilitated the seizure of more than $30 million worth of stolen crypto. These seized funds were linked to North Korean hackers.

Chainalysis recovery effort

According to the investigation report released by Chainalysis, it was revealed that the hackers gained access to the private keys of some of Ronin Network’s validators, resulting in the siphoning of funds that were laundered using over 12,000 different crypto addresses. The stolen funds were sent to intermediary wallets, which were then mixed in batched using Tornado Cash and swapped for Bitcoin. The Bitcoin was also mixed in batches and then sent over to cash-out points using cross-chain bridges in order to obscure the source of funds.

Chainalysis, which recently raised $170 million at an $8.6 billion valuation, further reported that its Crypto Incidence Response Team (CIRT) utilized advanced tracing techniques to track the stolen funds to cash-out points while liaising with law enforcement and key industry players to quickly freeze funds. That indicates that even the most sophisticated hackers can be traced with the use of appropriate blockchain analytics tools, along with the collaboration of competent compliance professionals and law enforcement agencies.

Although the $30 million seized represents a small fraction of the entire funds stolen during the attack, Chainalysis announced that most of the funds stolen from Ronin Network breach still remain unspent in cryptocurrency wallets under the hackers’ control. Hence, the firms continue to intensify efforts toward uncovering the remaining funds that were stolen.

Binance was also instrumental in Axie Infinity’s $150 million fundraiser to restore funds lost as a result of the Ronin Network attack.