Hackers are switching to centralized exchanges to fund crypto attacks!

Cryptos are still relatively new and unregulated. And hackers are using this opportunity. Hackers are digitizing themselves with time and are devising new fraud traps. Even with the passage of time, the number of such hackers is increasing and the concern about them is increasing. Nowadays we hear such incidents quite often and they have become common occurrences in digital currency nowadays. Recently hackers have found new fraud traps using centralized exchanges to finance their attacks.

In recent times, hackers need to fund their wallets in order to pay the transaction fees required to attack different websites or different sites or wallets. We know that public ledgers usually work transparently, so we need to carefully consider how to protect ourselves from such crimes by exploiting this transparency and not associating ourselves with the crimes of these hackers.

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Many may know the name Tornado Cash as it used to be the industry standard for covering one's tracks. Today, such Tornado caches are used by hackers and privacy advocates alike. But the hackers involved in such activities often work their way around the know-your-customer (KYC) procedures of exchanges when one of them funds their account for transactions.

Nowadays it is seen that most of the hackers do transactions through centralized exchanges in terms of transactions. About a third of this number and their funds come from centralized exchanges (CEXs). Analysis of funding sources for recent attacks by blockchain monitoring firm Forta Networks shows that hacker favorite Tornado Cash now represents less than half of the hacks studied. They also choose other methods for transactions. Other financing methods include the novel privacy tool Railgun and the 'middleware operations software' UnionChain.

It got complicated for hackers to cash out around 2022 when the US Treasury banned crypto mixing services. Tornado Cash remains the dominant source of funding for on-chain hacks, however. Some addresses were subsequently flagged by the exchange as having touched any 'tainted' funds typically originating from mixers when their cash outs were banned.

Hackers have even approached artificial intelligence to use fake information to pass KYC as claimed in a recent article on 404 Media. It is claimed that a website called OnlyFake was used to pass the KYC check on OKX using a $15 AI-generated fake ID. As we know today artificial intelligence can create completely new people and all their documentation. And by using this technology, hackers can easily bypass KYC on exchange sites for exchange-financed attacks.

But an important point here is that the actual KYC whole thing can get a lot more complicated if the crypto industry is on-ramping. The KYC problem of on-ramping hackers in such digital currency industry can become complicated and this problem is bound to affect many other industries. However, such problems may be solved in the future if cryptographic proofs are widely used, as well as the integration of the technology underlying cryptocurrencies with exchange sites. But to protect against these crimes, exchanges must make their KYC controls strict and transparent. If you want to more read about this news then you can read this news.