According to Bijié Wǎng, a hacker is attempting to launder approximately 1,337 ETH (nearly $4 million) stolen from the Unleash Protocol via Tornado Cash on Ethereum. On Tuesday, Unleash disclosed a security breach that resulted in losses of around $3.9 million. The project has suspended operations and initiated a forensic investigation. The attack appears to stem from a compromised multisignature mechanism. Unleash stated that an externally owned address gained governance control through the protocol’s multisignature system and executed an unauthorized contract upgrade, enabling asset withdrawals outside of normal governance procedures. The stolen assets include WIP, USDC, WETH, stIP, and vIP, most of which were bridged to Ethereum and sent to Tornado Cash to obscure audit trails. PeckShield noted that the attacker sent multiple 100 ETH blocks to the mixer. CertiK flagged suspicious Wrapped ETH and IP token withdrawals sent to external accounts via SafeProxyFactory. Unleash clarified that the incident originated from its governance and permissions framework, with no evidence of damage to Story Protocol contracts, validators, or infrastructure. Unleash, built on Story Protocol, is one of the more prominent applications on the newer Layer 1 platform focused on tokenized intellectual property. The Block reached out to Unleash for comment but has not received a response.
Unleash Protocol Hacker Washes $4M in ETH via Tornado Cash
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Summary
Unleash Protocol hacker is laundering 1,337 ETH (nearly $4 million) via Tornado Cash on Ethereum, per Bijié Wǎng. The breach, disclosed Tuesday, cost the project $3.9 million. A compromised multisignature system allowed an external address to seize governance control and execute an unauthorized protocol update. Stolen assets include WIP, USDC, WETH, stIP, and vIP, most bridged to Ethereum and sent to Tornado Cash. PeckShield tracked multiple 100 ETH deposits to the mixer. CertiK flagged suspicious Wrapped ETH and IP token withdrawals via SafeProxyFactory. Unleash said the incident stemmed from governance flaws, not Story Protocol contracts. The project has paused operations and launched a forensic investigation. ETH news highlights the ongoing risks in smart contract security.
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