Whale Loses 27.3 Million in Multisig Exploit: How Criminals Compromised the Private Key

A serious security incident has impacted the wallet of a major crypto sector whale, with losses that could exceed $40 million. According to the analysis by blockchain security platform PeckShield, the drain was caused by the compromise of a private key associated with a multisig wallet, allowing criminals to siphon off significant assets in a short period.

The Vulnerable Architecture of the Multisig Wallet

The vulnerability was not simply a matter of passive theft. Hacken Extractor investigators discovered that the so-called “compromised” wallet may never have been truly controlled by the legitimate owner. According to reconstructions, a malicious actor created the multisig wallet on November 4 at 07:46 UTC, transferring the funds to themselves just six minutes later. This pattern suggests that the original owner never had full control of the cryptographic keys, making the wallet vulnerable from the start.

The wallet, funded approximately 44 days before the exploit, exemplifies how even large investors can fall victim to sophisticated attacks based on social engineering or initial private key compromises.

The Drain and Rapid Laundering

At the time of the drain, the attacker extracted $27.3 million from the wallet, leaving only about $2 million in liquid assets. The attacker immediately began laundering operations via Tornado Cash, converting 4,100 ETH ( worth approximately $12.6 million at current market prices, with ETH traded at $3.09K) in untraceable funds.

Simultaneously, the malicious actor maintained control of the original multisig wallet, which contained a leveraged long position on Aave. This persistence in control of the funds suggests that the attacker may attempt further drains or trading manipulations.

Laundering Methodologies and Asset Protection

Cryptographic mixers like Tornado Cash have become essential tools for criminals to conceal the origin of stolen funds and complicate recovery operations. Using a liquidity calculator to trace amounts, it is possible to observe how these mixers process enormous volumes of suspicious transactions daily.

A significant precedent involves a theft from a cryptocurrency exchange, where the Lazarus Group stole funds worth approximately $250 million in Ethereum. The group began laundering just days after the theft, moving over $605 million in ETH within three days of the attack. By the first week of March, they had fully laundered the 499,000 ETH stolen, leveraging a combination of cryptographic mixers and decentralized DEXs.

Implications for Multisig Wallet Security

This incident highlights a often underestimated risk: even when a whale believes they are using an advanced security architecture like multisig, the compromise of a single private key can be catastrophic if the wallet has not been independently verified from the outset. The attack timeline reveals that the first signs of anomaly date back to November 4, well before the public discovery.

The main lesson is that no security structure is immune if the cryptographic foundations have been compromised from the beginning. whales and institutional investors must implement additional controls, multi-layer verification, and independent audits of their private keys before transferring significant funds into new wallets, even when these use advanced multisig protocols.