How Hackers May Try To Launder Stolen Crypto

The Total amount of stolen cryptocurrency this year is the highest we’ve ever seen, with over $1.8 billion stolen so far including the recent Harmony One hack. In this article we’re going to follow the trail, and understand what happens with stolen crypto, and how might a hacker try to “clean” stolen coins.

First off, this will mostly apply to decentralised chains and bridges, as centralised chains such as the Binance Smart Chain and Tether are able to freeze the stolen funds and render them unusable unless returned.

First Stop: own on-chain hot wallet

Once the hack is performed and the funds are seized, the first stop in the journey of the newly-acquired crypto wealth for a hacker is his own brand-new on-chain hot-wallet. If you’re relatively tech-savvy then you know how important it is that this hot wallet address be disposable, so don’t expect to see any other transactions associated to this wallet, apart from receiving the hacked funds, and sending them forward to another address.

Goes without saying that if the hacker linked this wallet address to OpenSea, Binance, or any other website or service that associates this wallet with their personal e-mail address, they might as well just walk into the police station and confess, because the game is up.