- Zklend’s protocol was hacked for $ 9.5 million.
- The pirate tried to move the crypto using the Railgun privacy protocol, but was refused.
- The developers tried to balance users concerned with privacy and to keep criminals away.
The software that hides the crypto flow is a standard part of the pirate toolbox, allowing them to sell unnoticed stolen assets.
This software has just thwarted a pirate.
Protocol of confidentiality, Railgun, returned from a transaction Thursday in which a pirate tried to move nearly $ 10 million in stolen crypto Blockchain Records.
It is perhaps the first victory of the real world for the technology built to satisfy two diametrically opposed parts: regulators and law enforcement organizations alarmed by the growing use of crypto by cybercriminals, and cyperpunks Obsessed with privacy that created the first cryptocurrencies and were their oldest users.
This technology was first detailed in 2023 paper Written by the co-founder Ethereum Vitalik Buterin and several other researchers.
The confidentiality improvement software has been controversial in crypto. Supporters have long argued that blockchains need confidentiality if they become the backbone of a new financial system – no one will traditionize entirely “onchain” if it has the potential to reveal their whole financial history.
But confidentiality protocols have proven to be popular with cybercriminals, including pirates with links with North Korea and its nuclear weapon program. The United States have sanctioned Crypto “Mixer” Tornado Cash and charge One of its developers with money laundering and escape sanctions, a case that has the potential to considerably cool the development of software preserving confidentiality, according to industry groups.
Zklend, a loan and borrowing protocol on the Starkware blockchain, undergone a piracy of $ 9.5 million on Thursday, according to crypto security experts. The pirate transferred the crypto to the Ethereum blockchain, then tried to transfer it again using Railgun, a protocol that allows users to break the traceability chain between blockchain transactions.
This would have allowed the pirate to continue to move the stolen crypto through the blockchain or transfer it to an unnoticed exchange, where it could be exchanged for money.
Instead, Railgun has functionally refused the pirate’s request.
Indeed, it uses a version of detailed technology in Buterin’s 2023 paper.
This technology allows honest users to create cryptographic evidence showing their money – the origin of which is otherwise kept secret – does not come from portfolios associated with stolen funds or any other illegal activity.
“And if they are (badly acquired), the only action that the bad actor can perform is to return to their original address,” said Alan Scott, co-founder of the Railgun project, said DL News.
The notes of the Safety Expert Officer of the Pseudonym Crypto call him a solution that has found a “perfect balance”.
“This will avoid unnecessary attention and regulatory pressure while respecting the basic principles of privacy,” he said DL News.
“After all, it was not the railgun that sent the money to the pirate. It was the pirate who could not use the service and had to withdraw his money. »»
Aleks Gilbert is DL News“Defi Reporter based in New York. You can reach it at aleks@dlnews.com.
