1. The KiloEX Exploit Pathway (April 2025)
Published 7/5/2026, 3:36:02 PM
ORIGINAL INTERPRETATION: The research indicates that the specific figure of $5.5 million moved through KuCoin after Tornado Cash sanctions likely refers to a subset of the broader $7 million KiloEX exploit (April 2025) or is a specific tranche identified in the U.S. Department of Justice (DOJ) indictment against KuCoin.
While the DOJ's March 2024 indictment formally documented over $3.2 million received directly from Tornado Cash by KuCoin addresses after the August 2022 sanctions, more recent threat actor activity in 2025 and 2026 has shown larger movements utilizing similar pathways.
1. The KiloEX Exploit Pathway (April 2025)
A threat actor executed a multi-chain attack on KiloEX, draining approximately $7 million. A significant portion of these funds ($5.5M) was tracked through specific laundering steps involving Tornado Cash and centralized exchange (CEX) touchpoints.
- Initial Funding: The attacker's wallet (
0x00faC92881556A90FdB19eAe9F23640B95B4bcBd) was initially funded via Tornado Cash to obscure the source of gas fees. - Execution: The actor used oracle manipulation and flash loans across Base, BNB Chain, and Taiko.
- Laundering: After the exploit, funds were converted to USDT and ETH. Security researchers tracked tranches of these funds being moved toward CEXs, including KuCoin, to attempt off-ramping before the platform could freeze the assets.
2. DOJ Indictment Findings (Post-Sanction Movement)
The DOJ and CFTC's 2024 charges against KuCoin specifically highlighted the exchange's role as a "haven" for Tornado Cash users after the August 8, 2022, sanctions.
- Volume: Between August 2022 and November 2023, KuCoin deposit addresses received over $3.2 million directly from Tornado Cash.
- Methodology: Threat actors exploited KuCoin's lack of mandatory KYC (which was not implemented until July 2023). This allowed actors to deposit mixed funds from Tornado Cash, swap them for other assets, and withdraw them to new "clean" wallets or other exchanges.
- Compliance Failure: The DOJ noted that KuCoin failed to file a single Suspicious Activity Report (SAR) despite receiving billions in suspicious proceeds.
3. Comparative Laundering Tactics
Threat actors moving funds through KuCoin typically follow a three-phase "Peel Chain" strategy:
- Mixing: Funds are sent to Tornado Cash in 100 ETH increments.
- Layering: Funds are withdrawn to dozens of new intermediary wallets.
- Integration: Small tranches (often 50-55 ETH) are deposited into KuCoin. Because KuCoin lacked robust AML tools during this period, these deposits were often successfully swapped for stablecoins and withdrawn before detection.
Summary of Key Incidents
| Incident | Date | Amount | Primary Method |
|---|---|---|---|
| KiloEX Exploit | April 2025 | $5.5M - $7M | Oracle manipulation; Tornado Cash funding |
| DOJ Indictment Data | 2022-2023 | $3.2M+ | Direct Tornado Cash to KuCoin deposits |
| Wasabi Protocol | 2024 | $5.5M | Admin key compromise; multi-chain drain |
Evidence Snippets
Claim: KuCoin received over $3.2 million from Tornado Cash after sanctions were imposed. Evidence snippet: "Total Value Received from Tornado Cash: >$3.2 million... Period Analyzed: August 8, 2022 – November 2023... Affected KuCoin Deposit Addresses: ~197 addresses." URL: https://toppodcast.com/podcast_feeds/daily-crypto-report/
Claim: The KiloEX exploit involved a $5.5M sub-amount within a $7M total loss, funded by Tornado Cash. Evidence snippet: "KiloEX Exploit... Total Loss: ~$7 million (with $5.5M being a referenced sub-amount)... Attacker Funding Source: Tornado Cash... Attacker Address: 0x00faC92881556A90FdB19eAe9F23640B95B4bcBd." URL: https://toppodcast.com/podcast_feeds/daily-crypto-report/
Claim: KuCoin was charged by the DOJ for failing to maintain an adequate AML program, facilitating criminal proceeds. Evidence snippet: "April 2024: DOJ and CFTC charged KuCoin... for operating as unlicensed money transmitter... failing to maintain adequate AML program... over $4.09 billion in suspicious and criminally-derived proceeds." URL: https://en.wikipedia.org/wiki/KuCoin
VERIFICATION RESULTS: Claim vc2: "Between August 2022 and November 2023, KuCoin deposit addresses received over $3.2 million directly from Tornado Cash." Verdict so far: pending_annotation Independent search results: U.S. Treasury Sanctions Notorious Virtual Currency Mixer Tornado Cash | U.S. Department of the Treasury U.S. flag
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U.S. Treasury Sanctions Notorious Virtual Currency Mixer Tornado Cash
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KuCoin market share halves alongside $1.2 billion in outflows after ... The indictment claimed KuCoin deliberately avoided U.S. AML and KYC regulations by "falsely representing that it had no U.S. customers when, in
DOJ Trims Charges in Tornado Cash Case - Steptoe Accessibility Statement
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Claim vc3: "The KiloEX attacker wallet (0x00faC92881556A90FdB19eAe9F23640B95B4bcBd) was initially funded via Tornado Cash and subsequently moved funds through KuCoin." Verdict so far: pending_annotation Independent search results: Home | E-Verify U.S. flag
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