Updated on:12/19/2025 04:46 PM 
The cryptocurrency industry faces serious security concerns as analysis from Arkham Intelligence reveals that perpetrators of the massive July breach against WazirX have successfully laundered approximately $224 million of the stolen $230 million, leaving only $6 million in Ethereum (ETH) remaining in uncleaned funds.
This security breach, which compromised over 45% of the Indian exchange's total reserves, involved a sophisticated operation targeting various digital assets. The attackers made off with substantial holdings, including more than $100 million in Shiba Inu (SHIB) and $52 million in Ethereum from a compromised wallet.
According to on-chain data analyzed by blockchain security experts, the perpetrators have utilized Tornado Cash extensively to obscure the origins of these illicit funds. Since August, over $50 million has been channeled through this privacy-focused service, with recent transfers accelerating significantly. A notable transaction involved moving 3,792 ETH, equivalent to approximately $10 million, further complicating recovery efforts.
Tornado Cash has emerged as a preferred tool for criminals attempting to launder cryptocurrency due to its ability to mask wallet addresses and transaction histories. While the technology itself operates in a legal gray area, its application in criminal activities has drawn increased regulatory scrutiny. Earlier this year, the service's developer, Alexey Pertsev, faced legal consequences in the Netherlands, receiving a prison sentence exceeding five years for his involvement in money laundering operations.
The WazirX incident has highlighted critical vulnerabilities in crypto exchange security protocols, prompting industry-wide discussions about enhancing protective measures and improving transparency during crisis situations.
In the aftermath of the cryptocurrency exchange hack, WazirX has initiated a restructuring process in Singapore to address its financial obligations and operational challenges. Despite implementing recovery strategies, the exchange has encountered substantial criticism regarding its crisis management approach and communication with affected users.
The situation has been further complicated by conflicting statements from industry stakeholders. Binance, previously associated with WazirX, has publicly clarified its lack of involvement in the security breach, distancing itself from the compromised exchange. This contradicts earlier assertions made by WazirX co-founder Nischal Shetty, creating additional reputational damage for the already troubled platform.
As the majority of stolen funds have been successfully laundered, WazirX confronts significant obstacles in asset recovery, raising broader questions about the exchange's long-term viability and the urgent need for enhanced blockchain security frameworks across the cryptocurrency ecosystem.
