Privacy Cash halts deposits after Elliptic traces about $1.2 million of Binance-theft money into its privacy pools, while withdrawals stay open

Privacy Cash paused deposits to its privacy pools on Wednesday after blockchain analytics firm Elliptic traced about $1.2 million in theft-linked ETH and SOL into them, crypto.news and The Defiant reported. Users deposit tokens into a pool and later withdraw them to another address, with zero-knowledge proofs meant to hide the link between the two. Withdrawals remain available.

Elliptic traced about 41 ETH and 9,600 SOL, roughly $1 million combined, on Tuesday and about 2,300 more SOL on Wednesday, crypto.news says. Onchain Lens had separately flagged 8,567 SOL, about $798,000, from an address linked to the Binance attacker. The project said it wants to stop bad actors from using the product and will tighten its wallet screening. Its documentation already describes a relayer that uses CipherOwl to reject flagged addresses, but the announcement did not explain how the funds got through, crypto.news notes.

The sum is small against the $6.34 billion Binance says was taken. Binance co-CEO Richard Teng said on Tuesday that the exchange had replenished 98% of the affected assets, which is not the same as recovering the stolen coins. The FBI has published the attacker's addresses, and no date has been given for deposits to reopen.