More than a year after orchestrating one of the most significant exploits in decentralized finance, the perpetrator behind the Radiant Protocol hack continues to systematically cash out their ill-gotten gains. Recent movements of substantial Ether (ETH) through the privacy mixer Tornado Cash underscore a patient, calculated laundering strategy that has persisted since the initial breach, challenging compliance efforts and raising critical questions about cross-chain security.
The Anatomy of the Radiant Protocol Breach
The saga began on October 16, 2024, when Radiant Protocol's lending pools on Arbitrum and BNB Chain were drained, resulting in a staggering loss estimated between $50 million and $58 million. Technical analyses quickly pinpointed the root cause: an operational compromise, not a code flaw. This was a sophisticated attack that exploited vulnerabilities in keyholder procedures and approval processes.
"The breach was due to an operational compromise involving keyholders and approvals that allowed an attacker to push malicious transactions through a multi-signature process."
Security firms detailed how signers were manipulated into approving illegitimate transactions within Radiant's three-out-of-eleven multi-signature scheme. While this broad signer set aimed to enhance availability, it inadvertently expanded the attack surface, making it more susceptible to device compromises and social engineering tactics. Investigations by Halborn and others, alongside Radiant's own updates, painted a clear picture of how poor device hygiene and approval protocols created the windows the attacker exploited. Later reports even suggested state-backed actors using impersonation were involved.
A Year of Calculated Laundering: The Slow Bleed Strategy
The period following the hack established a pattern that continues today. Stolen funds were systematically moved from Layer 2 networks back to Ethereum mainnet, leveraging bridges for liquidity. Balances were then consolidated into ETH, the preferred cryptocurrency for efficient entry into mixing services like Tornado Cash.
Recent activity provides stark evidence of this methodical approach:
- October 22-23, 2025: Approximately 2,834.6 ETH, worth around $10.8 million, was deposited into Tornado Cash. A significant portion originated from the Arbitrum bridge via EOA 0x4afb.
- October 31, 2025: Another 5,411.8 ETH, valued at approximately $20.7 million, was transferred to Tornado Cash. These deposits were modular, aligning with typical Tornado pool norms.
This isn't a hasty exit but a "slow bleed" strategy. By breaking down large sums into smaller, standard denominations for Tornado Cash, the exploiter complicates tracing. The public blockchain ensures transparency, yet the methods employed create a fragmented, costly-to-stitch-together transaction graph.
Compliance Challenges in a Regulatory Gray Zone
Despite obfuscation, compliance teams remain vigilant. They cluster addresses based on shared gas patterns, timing, and "peel chains"—small withdrawals that spread wide before aggregating. However, the legal landscape surrounding decentralized mixers is complex, creating a "gray zone." Courts have often narrowed government interpretations of sanctioning decentralized software, leading to mixed results in prosecuting mixer-related cases.
This environment means while investigations can catch exits, friction shifts from software limitations to intricate process analysis. Exchanges increasingly rely on behavior-driven controls rather than blanket bans.
Lessons for the Crypto Ecosystem
The Radiant hack and its prolonged aftermath offer crucial lessons for the decentralized finance industry. Design choices inherently carry financial outcomes. Cross-chain bridges and routers, while enabling seamless user experiences, also concentrate value and potential points of failure, making them attractive targets for exploiters.
To mitigate such risks, protocols must prioritize:
- Hardened Keyholder Procedures: Implement stringent controls for multi-signature signers.
- Narrower Approvals: Limit the scope and frequency of sensitive transaction approvals.
- Real-Time Bridge Monitoring: Proactively track and alert on unusual activity.
- Robust Operational Security Culture: Treat signer devices and private keys as "crown jewels."
The Radiant exploiter's continued success highlights that the "rails" for such activities remain operational. Until conditions change—through enhanced security, improved tracing, or clearer regulatory frameworks—we can expect more Tornado Cash deposits and bridge activity linked to the original hack. Each patient exit erodes confidence in cross-chain abstractions, underscoring the urgent need for comprehensive operational audits alongside code audits, as skilled thieves precisely identify where system seams lie.
Source: CryptoSlate
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