- The Nomad bridge hackers used stolen funds to take advantage of Ethereum’s ($ETH) price drop and buy 16,892 $ETH.
- The hackers moved ~2,400 $ETH to the crypto mixer Tornado Cash to hide the transactions. Investigation firm Peckshield discovered the deposit.
- Both the crypto and global finance markets crashed yesterday, allowing hackers to use stolen funds to buy the dip.
In August 2022, hackers stole crypto assets worth ~$190M from Nomad, a crypto bridge that helps communicate between blockchains.
Monday’s crypto and broader market crash saw $ETH lose ~22% of its total value (from a $2.712 high to a $2.220 low). Taking advantage of $ETH’s price dip, the Nomad bridge hackers purchased 16,982 $ETH using the funds they stole.
Let’s unpack the hack and what such volatility means for the broader crypto market.
Nomad Exploiters Used 3.7M $DAI to Buy 16K+ $ETH
After 500 days of inactivity, ‘Nomad Bridge Exploiter 2‘ swapped 3.7 $DAI for $16,892 $ETH using CoW (a DEX aggregator). At the current $ETH trading price of $2.5K, the hackers made $4M, a 10% increase in their investment.
The hackers then transferred 2,500 $ETH to Tornado Cash, a cryptocurrency privacy program currently under US sanction. Lookonchain and PeckShieldAlert picked up the transfer.
#PeckShieldAlert #NomadBridge Exploiter-labeled address has transferred 39.75M $DAI & 17.75 $ETH to an intermediary address 0x663a…f448
The $DAI was swapped for 16.89K $ETH, & 2.4K $ETH (worth ~ $7M) was transferred to #Tornadocash. pic.twitter.com/cPFOpE9tSF— PeckShieldAlert (@PeckShieldAlert) August 5, 2024
As the crypto mixer hides transaction history, analysts are uncertain whether the hackers have cashed the crypto in or are still holding onto it in the hope that $ETH’s value will increase.
Global Financial Market Crash Sparks Crypto Turbulence
The crypto market’s turbulence reflects a much wider crash that is affecting stock markets globally.
Since the news broke, Bitcoin lost 16% of its value (from a $58.5K high to a $50K low), $ETH’s 24-hour trading volume has dropped by ~26%, some meme tokens have dropped 30%, and the total crypto market volume has plummeted by ~11%.
These losses were mirrored in the wider financial markets. NVDA dropped by 7.25%, Google by 4.84%, and Amazon by 4.50%, possibly due to mass sell-offs and fears of a US recession. The NIKKEI experienced its worst drop in 37 years, while DAX and S&P 500 declined 7%.
Our Verdict – Is It a Big Deal?
The current situation is a stark reminder of the volatility of not just the crypto industry but also the broader financial market. However, it may not be all doom and gloom.
Analysts have mixed opinions about whether the market will recover. Some say we’re in for another drop, while others cite similar previous crashes that recovered relatively quickly.
A possible ray of light through the clouds is that Ethereum ETFs recorded their second-largest daily inflows totaling $48.7M. The markets have seen worse crashes, such as when the price of $ETH halved between November 2021 and January 2022. We’ll have to wait and see how the market recovers.
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Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
