Railgun Blocks Inferno Drainer’s Attempt to Launder Stolen Funds Worth 174 ETH

Popular crypto privacy protocol Railgun has successfully thwarted Inferno Drainer’s latest effort to launder stolen funds, which were sent back to the original wallet’s address.

According to a July 10 post by SlowMist’s anti-money laundering tracking system, MistTrack on X, an attempt to launder over 174 ETH, worth around $533,000 at the time, was intercepted by Railgun. This forced the perpetrators to return the stolen ETH to Inferno Drainer’s original wallet.

Inferno Drainer is Back

Inferno Drainer, a notorious multichain crypto drainer, has been operating under a scam-as-a-service mode. It deceived victims by using sophisticated phishing websites to trick them into connecting their crypto wallets to the attackers’ network.

The group announced shutting down its operations after reportedly siphoning off over $80 million from 5,000 victims via 689 phishing sites from a period of November 2022 to November 2023. However, Inferno Drainer resumed its activities in May, citing “increased demand” and the exit of competitors like Pink Drainer as the reason behind its return to the illicit market.

Despite its inactivity for nearly six months, the scam group claimed it drained more than $125 million in crypto assets in what it described as “private operations.”

“We made this decision after other major competitors shut down and due to people attempting to resell the drainer, as we don’t want people to get backdoored/scammed/miss hits because of other incompetent drainers.”

Railgun Faces Scrutiny

Tornado Cash has been widely used to launder stolen funds by scammers, including the wallet-draining group Inferno Drainer. Following the US government’s sanctions on the crypto mixer, experts have labeled Railgun as an alternative to it.

Popular crypto reporter Colin Wu had also claimed that Railgun was being used instead of Tornado Cash by the notorious North Korean hacker group Lazarus Group. Wu referred to a statement by the FBI from January 2023 that accused Railgun of being used to launder more than $60 million worth of ETH stolen during the 2022 Harmony Bridge heist.

Railgun, however, refuted accusations that it is being used by North Korea and other United States-sanctioned entities to launder stolen digital assets. Deeming the claims as “false reporting,” Railgun stated that the Lazarus Group cannot access its system, thanks to its ‘Private Proofs of Innocence’ feature, which has been in place since January 2023.