Ethereum whale loses $27 million: Pi link reveals money laundering scheme and auto-liquidation risks

A serious security incident has just been publicly disclosed involving a well-known Ethereum “whale” with enormous assets. Using link analysis technology—connections formed through continuous transaction actions—security experts have uncovered the entire sophisticated attack process, from private key exposure to a carefully planned money laundering system.

According to a report from PeckShield (a blockchain security analysis firm), the victim’s entire multisig wallet funds—worth approximately $27.3 million—have been drained. This occurred after the private security key was compromised, allowing the attacker to gain full control of the financial giant’s joint account.

Multisig breach: Pi link analysis reveals connection between private key leak and money laundering

The most significant pi links revealed via Etherscan show that the address “0x1fCf1” repeatedly sent 100 ETH to Tornado Cash—a pattern that is not a “panic response” but a carefully prepared money laundering scheme. Blockchain on-chain evidence also proves that the withdrawal address fully controls the victim’s multisig permissions.

During the attack window, the attacker moved $12.6 million (about 4,100 ETH) through Tornado Cash—a service that obscures asset origins. The remaining assets—around $2 million in liquidity tokens—are still under the attacker’s control and have not yet been moved.

Tornado Cash laundered $12.6 million from stolen assets

The attacker’s money laundering strategy demonstrates remarkable thoroughness. Instead of making a single large transfer—which could trigger security alerts—they divided the funds into 100 ETH batches and systematically sent each one. This sophisticated method minimizes detection risk and creates a flow that appears “normal.”

Automatic liquidation mechanism: Risks lie in what remains

However, the real danger isn’t just what has been lost. According to a snapshot of the Aave interface, the victim’s multisig still maintains a leveraged long position (borrowing against collateral): approximately $25 million worth of ETH used as collateral to borrow $12.3 million DAI (a stablecoin). The current health factor is 1.68—indicating the wallet is still operational but in a “danger zone.”

What is automatic liquidation risk? If ETH prices drop sharply, the health factor will fall below 1.0, triggering Aave’s automatic liquidation mechanism. At that point, collateral assets will be sold automatically at lower prices to cover the debt, causing a chain reaction of further losses. The attacker doesn’t even need to “dump” everything—just a sharp ETH price decline could trigger a negative sell-off.

201 tokens affected: detailed list of stolen assets

Etherscan wallet analysis shows the extensive loss from this incident. Besides 100.3184 ETH (currently valued at about $193,414 at $1.93K per ETH), the account holds approximately $1.37 million spread across 201 different tokens.

The largest stolen assets include:

• 303.44 WETH (Wrapped ETH): valued at about $585,643
• 2,216.36 OKB (exchange token): valued at $234,802
• 4,928.74 LEO (Bitfinex token): valued at $36,374
• 151,990.97 FET (Fetch.ai token): valued at $30,870

In total, the stolen tokens not only represent a massive financial loss but also highlight the victim’s diversified asset portfolio—a strategy completely nullified by the loss of the only private key.

This incident underscores the importance of protecting private keys and reveals the hidden risks in DeFi protocols when large assets are used as collateral. Pi link analysis not only helps identify the perpetrators but also provides valuable lessons for the blockchain security community.