Crypto privacy protocol Railgun has successfully blocked an attempt by the notorious Inferno Drainer to launder stolen funds. The attempt involved 174 ETH, valued at around $533,000, which was returned to the original wallet.
Railgun Stops Laundering Effort
According to a July 10 update from SlowMist’s anti-money laundering tracking system, MistTrack, Railgun effectively thwarted an effort to launder over 174 ETH. This intervention forced the scammers to return the stolen cryptocurrency to Inferno Drainer’s original wallet.
Inferno Drainer Resurfaces
Inferno Drainer, infamous for tricking victims into connecting their crypto wallets to fraudulent networks via phishing websites, initially claimed to shut down after stealing over $80 million from 5,000 victims across 689 phishing sites between November 2022 and November 2023. However, the group resumed activity in May, citing a rise in demand and the exit of competitors like Pink Drainer.
Despite a nearly six-month hiatus, the group reported draining over $125 million in crypto assets during what it described as “private operations.”
Railgun Faces Increased Scrutiny
With Tornado Cash previously serving as the go-to tool for laundering stolen funds, including by Inferno Drainer, its sanction by the US government has put Railgun in the spotlight as a potential alternative. Crypto journalist Colin Wu noted that Railgun has allegedly been used by the North Korean hacking group Lazarus Group, especially after the 2022 Harmony Bridge heist.
The FBI, in January 2023, accused Railgun of being involved in laundering over $60 million in ETH from the Harmony Bridge attack. Railgun, however, has denied these claims, asserting that its ‘Private Proofs of Innocence’ feature, implemented since January 2023, prevents North Korea and other sanctioned entities from using its system.
Conclusion
Railgun’s successful interception of the laundering attempt by Inferno Drainer underscores the ongoing struggle between privacy protocols and malicious actors. While Railgun has faced scrutiny, this incident demonstrates its capability to counteract illicit activities and secure stolen funds.
Disclosure: This article does not constitute investment advice. The information provided is for educational purposes only.
