Crypto detective ZachXBT successfully anonymized withdrawals from crypto mixer Railgun while identifying suspects connected to NFT wash transactions and the $28 million Bittensall hack.
Decentralized protocol Bittsensor suffered a supply chain attack in 2024 that resulted in the theft of $28 million from 32 TAO token holders.
In an investigation revealed today, ZachXBT revealed how these funds were tracked to an instant exchange where they were exchanged for the privacy-friendly cryptocurrency Monero.
Read more: Did the US government hack a fraudulent network for $15 billion in Bitcoin?
Almost $5 million worth of these funds were transferred to Railgun in batches of Ether, USDC, and wrapped Ether.
ZachXBT claims back then We de-anonymized Railgun withdrawals by applying timing and amount “heuristics”.”
According to the detective, “The unique denomination and short deposit times make Demix highly reliable.”
Railgun is a rival to Tornado Cash and has seen the likes of Ethereum creator Vitalik Buterin using its service.
In some cases, Railgun has leveraged protocol policies to return stolen funds, such as from the $9.5 million exploit of the Starknet network. On the other hand, it is also popular with the North Korean hacking group Lazarus Group.
Read more: What does Roman Storm’s conviction mean for the broader DeFi sector?
Crypto mixers are designed to be untraceable after funds are withdrawn. However, ZachXBT’s research seems to completely undermine this.
Wash Trading NFT Anime Girl
Once the cryptocurrency was obfuscated, the suspects sent the funds to three more addresses and performed various bridge transactions.
The funds were then used to make several purchases Anime-themed NFT They were then laundered through various high-value sales and transfers of funds.
Cryptocurrency Detective said, “It is very rare for NFT wash transactions to involve exploits/hacks.”
The Killer GF NFT series in question.
One of the addresses that received the funds was funded by an address belonging to a Bittensor user who goes by the alias “Rusty” and created “Skrtt racing,” a crypto project that bet on live-streamed Hot Wheels races.
ZachXBT linked this person to a lawsuit filed against the suspects in the Bittensor hack, noting that Rusty gave a statement in the lawsuit as Ayden B, denying any involvement in the scam but admitting to being the owner of the wallets that ZachXBT was able to identify during the investigation.
“I hope that in the future law enforcement will take up criminal cases” he said.
Protos reached out to ZachXBT to find out more. We will update this article if we receive a response.
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