Recent on-chain monitoring data indicates new fund movements related to a wallet theft incident that occurred on January 10, resulting in losses exceeding USD 282 million. After a period of inactivity, several addresses associated with the incident have resumed transfer activity. Approximately USD 63 million has been moved to newly created on-chain addresses, with subsequent detection showing that part of the funds flowed into the mixing protocol Tornado Cash.
This shift in fund flow has once again drawn market attention to the post-incident trajectory of stolen assets and the associated money laundering risks. Historical cases show that large-scale hacking incidents rarely involve immediate fund liquidation. Instead, attackers typically adopt multi-stage strategies—such as fund splitting, layered transfers, and mixing services—to gradually reduce traceability and evade risk detection.
Risk Signals Behind Abnormal On-Chain Fund Movements
From a compliance and security perspective, the reactivation of stolen funds on-chain is commonly regarded as a high-risk transaction signal. In particular, when funds are directed toward mixing protocols, the behavioral pattern itself has already been placed under heightened scrutiny by regulators in multiple jurisdictions.
Such transactions do not necessarily constitute illegal activity in and of themselves. However, within anti-money laundering and risk management frameworks, they generally require flagging, further analysis, and continuous monitoring.
For exchanges, custodians, and other on-chain service providers, the key issue is not merely whether an incident is known to have occurred, but whether related transactions can be promptly identified, risk levels accurately assessed, and appropriate compliance responses initiated.
From Incident Tracking to Continuous Monitoring: Transaction Behavior as the Critical Factor
As the frequency of on-chain security incidents increases, one-time address checks or purely post-event analyses are no longer sufficient. Regulatory and compliance practices increasingly focus on whether transaction behavior itself exhibits anomalous characteristics, such as links to historically risky events, increasingly complex fund paths, or large-value transfers occurring within short timeframes.
Against this backdrop, KYT (Know Your Transaction) capabilities have become an essential component of crypto-related operations. Only through continuous transaction monitoring and risk assessment can institutions identify potential issues as funds move through the ecosystem, rather than responding passively after the fact.
Transaction monitoring systems such as Trustformer KYT address this need by combining analysis of fund paths, behavioral patterns, and historical risk associations. This enables compliance teams to better understand the underlying risk logic of transactions and significantly enhance overall risk management effectiveness.
Conclusion: Transparent Monitoring as the Foundation for Managing On-Chain Risk
The renewed movement of stolen funds in this case once again highlights that the impact of on-chain security incidents is often long-term rather than short-lived. Only by establishing continuous and systematic risk monitoring mechanisms at the transaction behavior level can sufficient transparency be maintained across complex fund flows—providing a reliable foundation for compliance decision-making and effective risk control.