Why privacy coins often appear in post-hack fund flows

After crypto hacks, stolen assets usually move through a deliberate pipeline rather than being cashed out immediately: consolidation of victim funds, obfuscation through intermediary wallets and mixers, chain-hopping across blockchains, a privacy layer, and finally liquidation.

Privacy-focused coins often serve as a temporary “black box” at that privacy stage, further complicating the onchain history created by earlier steps. Privacy coins reduce onchain visibility by hiding senders, receivers and amounts, which is especially valuable in the critical days after a theft when monitoring and automated blacklisting are most intense.

Used alongside swaps, bridges and intermediary wallets, they act as a strategic firebreak in attribution and can ease negotiations in OTC and P2P transactions by limiting counterparties’ knowledge of a payment’s origin. Enforcement actions against mixers, bridges and certain exchanges push illicit flows toward alternative routes, including privacy coins.