Crypto.com ETH losses a concern for crypto fans

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People who are watching today’s crypto market have concerns about large amounts of Ethereum stolen from the Crypto.com exchange and how they may be laundered to remove a transparent chain of custody.

Sam Reynolds reports this morning at Coindesk reports that as of January 11, Crypto.com had shut down part of its exchange citing suspicious activity.

A January 17 tweet sounded an all-clear:

“Update: Withdrawal services have been restored,” spokespersons wrote. “All funds are safe. It will take time to clear the backlogs. We appreciate your patience.”

However, as Reynolds reports, hijackers seem to be running batches of 100 Ethereum through Tornado Cash, a “mixer” that some associate with a digital form of money laundering. And, it seems that the exchange has somehow “lost” 4600 ETH in the process of doing damage control.

“The funds have been reportedly moved using Tornado Cash which makes it difficult to trace,” writes BusinessInsider’s Bhushan Akolkar. “Technical issues on crypto trading platforms have been a very common thing off lately. During the peak demand, even some of the most popular crypto exchanges have been facing wide outages. … Crypto.com is one of the most popular trading platforms in the United States and serves more than 10 million customers. We would like to get further clarity from Crypto.com on this matter.”

Reynolds notes the U.S. FinCEN agency is looking at whether it can use the Bank Secrecy Act (BSA) to rein in these practices.

Meanwhile, the TORN token belonging to Tornado Cash is up 9% on the market. Ethereum for its part is down at 3-month lows at around $3115.

These types of losses, ambiguous as they are, can be immediately damaging to tech interests around a particular blockchain. If you have related holdings, keep an eye on this as it develops, and be ready to make moves accordingly. 

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