Hundred Finance Hacker Concludes Crypto Shuffle, Preparing for Stealthy Cash-Out?

The Hundred Finance hacker has begun converting their stolen funds into Ether, potentially signaling their preparation to cash out a portion of their loot. The hacker, who stole $7.4 million from the DeFi protocol in April 2022, has remained silent for over a year before initiating fund transfers, leading to speculation about their intentions.

Hundred Finance Hacker Shifts Stolen Funds into Ether: Preparing for a Covert Cash-Out?

Over a year after a malicious attack on the Optimism-based DeFi protocol Hundred Finance, the stolen funds, once totaling $7.4 million, have begun to stir. On Wednesday, at approximately 10:25 am London time, the enigmatic hacker initiated a series of transactions, withdrawing nearly $800,000 worth of Ether and Tether's USDT stablecoin from the decentralized exchange Curve.

These withdrawals were swiftly followed by a series of currency swaps on Uniswap, where the hacker converted the USDT, along with smaller amounts of PAXG, WOO, FRAX, and DAI, into Ether. The cumulative effect of these transactions boosted the hacker's Ether holdings by over $1 million.

The hacker's digital wallet now holds a substantial balance of $4.2 million in Ether, $1.2 million in DAI, $859,000 in Synthetix's sUSD stablecoin, and lesser amounts of Wrapped Ether, FRAX, SNX, and Wrapped Bitcoin. Notably, the hacker's sudden shift in strategy, after months of inactivity, has raised speculation about their intentions.

Possible Motive: Preparing for a Cash-Out

The hacker's recent actions may indicate an impending attempt to convert the stolen funds into fiat currency. To achieve this, they must break the chain of traceability linking the funds to the hacked wallet. Historically, hackers have employed crypto mixers like Samourai Wallet and privacy protocols like Twister Money to launder illicit proceeds.

However, the tightening regulatory landscape presents a significant challenge to this strategy. On April 24th, the European Parliament voted to ban crypto mixers as part of enhanced anti-money laundering measures. The United States has also taken action, with the DoJ charging two founders of Samourai Wallet for their role in facilitating money laundering.

Furthermore, authorities have seized control of crypto mixer servers, rendering these services inoperable. As a result, crypto mixers and privacy protocols have experienced a decline in usage as users become increasingly wary of their tainted reputation.

A Grim Outlook for Stolen Fund Recovery

The Hundred Finance hack exposed a vulnerability in the protocol's withdrawal process, enabling the hacker to exploit a rounding error and extract $7.4 million in various cryptocurrencies. Despite the initial offer of a $500,000 bounty for information leading to the hacker's arrest and the recovery of the stolen funds, subsequent efforts to negotiate a return failed.

Ultimately, Hundred Finance token holders voted to close the protocol down in August 2022, marking the end of the platform. As the stolen funds remain unaccounted for, the prospects for their recovery appear increasingly bleak.

Conclusion

The recent activity by the Hundred Finance hacker suggests that they may be preparing to cash out the stolen funds. However, the tightening regulatory environment surrounding crypto mixers and privacy protocols presents a significant obstacle. As authorities continue to crack down on illicit cryptocurrency transactions, the hacker faces an uphill battle in their quest to convert the stolen funds into fiat currency without leaving a trail.