Hackers begin laundering $477 million worth of stolen crypto

FTX filed for bankruptcy in the United States on November 2. 11, 2022, seeking court protection as he seeks a way to return money to users.

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Hackers who stole an estimated $477 million worth of cryptocurrency from collapsed FTX exchange began laundering the funds in bitcoins.

This month, after FTX filed for bankruptcy, new CEO John Ray III said that “unauthorized access to certain assets has occurred.”

Blockchain analytics firm Elliptic estimates that around $477 million worth of cryptocurrency was stolen from FTX.

The theft adds insult to injury to FTX, a once $32 billion crypto empire whose collapse has sent shockwaves through the industry.

The stolen money was converted into different digital coins, but the bulk – over $280 million – was turned into cryptocurrency etheraccording to public blockchain records of the account linked to the hackers.

Tom Robinson, co-founder of Elliptic, told CNBC that hackers are converting ether into a crypto product called RenBTC which is then converted into bitcoin through a bridge. This makes it possible to convert one crypto to another without going through a centralized exchange.

“This is a common tactic in laundering crypto thefts,” Robinson said.

So far, $74 million has been transferred to bitcoin from RenBTC.

Hackers will at some point want to cash out this money in fiat. However, Robinson said it would be “difficult” due to the “traceability of cryptography”.

He said he expects hackers to use “mixers to cover their blockchain trail.”

Mixers are services or software that obfuscate a crypto transaction trail on the blockchain, making it difficult or impossible to trace those funds, Robinson said.

“This may be one of the motivations behind moving these assets to bitcoin – the wider availability of mixing services,” he added.

The blockchain is a public record of cryptographic activity. Each coin can have its own blockchain. This allows you to know, to some extent, where the funds are flowing. Using blenders could make this difficult.

Compliance software firm Crypto Chainalysis in a tweet on Sunday also confirmed that the hackers were transferring funds.

On Sunday, FTX urged cryptocurrency exchanges to keep tabs on stolen funds if hackers attempt to process the money through one of their services.

“Exchanges should take all steps to ensure that these funds are returned to the bankruptcy estate,” FTX said in another tweet.

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