$2.3M USDT was stolen from two wallets due to a key compromise
Stolen funds were swapped for 757.6 ETH
Funds were laundered via Tornado Cash, says PeckShield
In another troubling sign of persistent security risks in the crypto space, two wallets have reportedly lost a combined $2.3 million in USDT following a private key compromise. Blockchain security firm PeckShield broke the news, revealing that the stolen funds were rapidly converted into 757.6 ETH and subsequently funneled through the controversial privacy mixer, Tornado Cash.
This method of laundering funds has become a go-to for attackers looking to obfuscate stolen assets, despite increased regulatory scrutiny and sanctions on Tornado Cash.
How the Attack Unfolded
According to PeckShield’s on-chain investigation, the attack began when the attacker gained access to the private keys of two wallets holding large USDT balances. After securing access, they executed a swap, converting the stablecoins into ETH — a common practice to avoid blacklisting by issuers like Tether.
The resulting 757.6 ETH, worth approximately the same as the stolen USDT, was then routed through Tornado Cash, making it much harder to trace and recover.
While the identity of the wallet owner or the method of the private key leak is unknown, this incident highlights the critical importance of private key security and wallet management best practices.
ALERT: Two wallets lost $2.3M USDT after a private key compromise; funds were converted to 757.6 $ETH and sent through Tornado Cash, per PeckShield. pic.twitter.com/Pj7DD8bKzu
— Cointelegraph (@Cointelegraph) December 23, 2025
Growing Use of Tornado Cash Despite Sanctions
Despite facing U.S. sanctions, Tornado Cash remains a tool of choice for laundering stolen crypto. This attack adds to a growing list of hacks and exploits where attackers have used the protocol to obscure the trail of funds.
Security experts continue to warn against storing large amounts of crypto in hot wallets or using weak private key storage solutions. As 2025 closes out, this serves as yet another reminder that in crypto, self-custody comes with high responsibility.
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