Expert Suggests $238 Million Hack of Unknown Genesis Trading Creditor

Renowned on-chain detective ZachXBT has highlighted a suspicious transfer of 4064 BTC ($238 million). The funds, potentially belonging to a victim, were sent to ThorChain, eXch, Kucoin, ChangeNow, Railgun, and Avalanche Bridge.

Seven hours ago a suspicious transfer was made from a potential victim for 4064 BTC ($238M)

Transaction hash
4b277ba298830ea538086114803b9487558bb093b5083e383e94db687fbe9090

Funds were quickly transferred to ThorChain, eXch, Kucoin, ChangeNow, Railgun, Avalanche Bridge.

— ZachXBT (@zachxbt) August 19, 2024

The Railgun team indirectly confirmed the expert’s concerns, stating that the protocol did not accept the coins due to the Private Proofs of Innocence check (asset “purity”).

Whilst RAILGUN is permissionless and anyone can send tokens in, any tokens that fail to generate a Private POI proof CANNOT enter the privacy set.

In this case, the tokens @zachxbt mentioned were unshielded back to the original address and gained no privacy.

— RAILGUN — Private & Anonymous DeFi (@RAILGUN_Project) August 19, 2024

“In this case, the tokens mentioned by ZachXBT were not shielded and were returned to the original address, gaining no privacy,” the developers wrote.

Journalist Colin Wu noted that one of the potential victim’s wallets received 642.4 BTC ($37.73 million) from Genesis Trading’s liquidators two weeks ago. Another address received 2173 BTC ($127 million) from the bankrupt platform approximately two years earlier.

One of the victim addresses: bc1qlx…k6cjkf’s 642.376 BTC (worth about $37.73 million) was transferred from Genesis Trading: Bankruptcy Distributions two weeks ago; another victim address: bc1q42…g4yckd’s 2.173k BTC (worth about $127 million) came from Genesis Trading two…

— Wu Blockchain (@WuBlockchain) August 19, 2024

ZachXBT responded negatively to the question of whether the Lazarus Group was “again” involved in the incident.

“This time, I think not (the behavior is somewhat different),” he explained.

The expert also doubted the impact of the assets on the price of digital gold, as only a small portion of the amount has been converted from BTC so far.

“This space is full of scams. And we wonder why there’s no bull run,” one user commented under Wu’s tweet.

In the first half of the year, criminals stole $1.6 billion in cryptocurrencies, shifting their focus to centralized exchanges, as noted by Chainalysis.

The largest incident was the hack of the Japanese platform DMM Bitcoin for $305 million.