On the night of January 10, while most of the world was sleeping, one of the largest individual heists in crypto history occurred in real time.
It wasn’t an error in the code or a breach of protocol, but a breach of human trust.
In a major step in social engineering, an attacker has successfully bypassed the gold standard of hardware wallet security, siphoning more than $282 million worth of Bitcoin and Litecoin from a single victim.
But the theft was just the beginning.
Details of the scam
As a blockchain researcher ZachXBT and security company PeckSchild By tracking events in real time, the attacker quickly proceeded to launder the stolen funds across multiple blockchains.
Hardware wallets like Trezor are often described as the most secure way to store crypto. But they have one major weakness, and that is the person using them.
Reports indicate that the victim was deceived through a very convincing impersonation.
The attacker pretended to support the “Trezor Value Wallet” and gained the victim’s trust. After this, the attacker convinced the victim to share their seed phrase that controls the wallet.
Once that happened, the hardware wallet no longer mattered.
Lost money and moved
After stealing over $282 million worth of Bitcoin [BTC] and Litecoin [LTC]the attacker saw that the transactions were visible on public blockchains.
To hide the trail, the attacker therefore turned to THORChain, a decentralized liquidity protocol.
Using THORChain, the attacker moved approximately $71 million, or approximately 928.7 BTC, across multiple chains.
Unlike centralized exchanges, THORChain does not require KYC, allowing the attacker to swap Bitcoin for Ethereum and Ripple [XRP] without providing any identification.
Once the money hit the Ethereum [ETH] network, the attacker took further steps to hide them.
A large amount, including 1,468.66 ETH worth approximately $4.9 million, was sent via Tornado Cash, a privacy mixer.
For those who don’t know, mixers combine money from many users, breaking the clear link between where the money comes from and where it ends up.
The attacker also traded large amounts of money in Monero, a privacy-focused cryptocurrency, which briefly pushed the price of Monero higher.
Market reaction and more
All this happened during a period of market chaos.
On the same day, crypto markets already fell due to Trump’s new rate shock.
Bitcoin decreased 2.26% to $93,075, while Litecoin fell 7.19% according to CoinMarketCap data.
However, as the number of scams increases, there are signs of progress.
Recently, Europol and international law enforcement agencies shut down a major fraud and money laundering network operating in multiple countries.
This group had stolen more than 700 million euros from thousands of victims.
Final thoughts
- This incident proves that crypto security flaws are no longer associated with bugs, but also with trusted stories.
- Cross-chain liquidity protocols have inadvertently become accelerators for large-scale money laundering schemes.