A Dormant Crypto Wallet Connected to FTX Hack Becomes Active, Moving $26 Million Worth of Ether
After almost a year of inactivity, a crypto wallet linked to the $600 million FTX exploit has become active and transferred 15,000 Ether (ETH) worth approximately $26 million. The movement of funds began on September 30 with the transfer of 2,500 ETH back into circulation.
Within 24 hours of the first transfer, over 10,250 ETH had been moved from the wallet. According to a report by CoinDesk, all the ETH has now been transferred, with a significant portion passing through the Thorchain router.
FTX Hacker Launders 15,000 ETH
In November 2022, shortly after FTX and its associated companies declared bankruptcy, an unidentified hacker exploited the platform and stole up to $600 million from multiple accounts. For some time, a single wallet held 15,000 ETH (approximately $26 million).
However, this weekend saw the first tranche of 2,500 ETH (worth around $4 million) being distributed through various channels. The crypto was divided into two and subsequently transferred multiple times. Approximately 700 ETH was moved via the Thorchain Router, while roughly 1,200 ETH went through the Railgun privacy tool. Another 550 ETH was routed to an intermediate wallet.
The choice of distribution channels suggests that the stolen FTX funds have been laundered. Railgun is a privacy wallet that allows users to store tokens and utilize them for decentralized financial services like lending and borrowing. Transactions made through Railgun are protected and typically remain undisclosed. Thorchain, on the other hand, is a bridge that enables token swaps between different blockchains without the risk of transfers being blocked.
According to data from Etherscan, the hacker sent over 6,000 ETH to Thorchain as part of their laundering efforts. Additionally, using the decentralized exchange aggregator 1inch, around 2,500 ETH (worth almost $4 million) was converted into Bitcoin. Some remaining funds were sent to a contract labeled “Metamask: Swap Router.”
Difficulty Identifying the Hacker and Recovering Funds
Despite being able to track the movement of funds, investors, creditors, and prosecutors have not yet been able to identify the hacker(s). The methods employed to launder and transfer the funds are making it increasingly challenging to recover them.
Sam Bankman-Fried Faces Trial
Former FTX CEO Sam Bankman-Fried is currently preparing for his criminal trial on October 3 in connection with the collapse of FTX. He faces seven charges, including two primary allegations and five conspiracy charges. Bankman-Fried has pleaded not guilty to all charges but remains detained while awaiting trial. He is also scheduled to stand trial again in March next year for five additional charges.
Hot Take: FTX Hacker Moves Millions Worth of ETH, Complicating Recovery Efforts
The recent activity of the dormant crypto wallet connected to the FTX hack has raised new challenges in recovering stolen funds. With 15,000 ETH worth approximately $26 million now moved through various channels, including privacy tools like Railgun and bridges like Thorchain, identifying the hacker(s) becomes increasingly difficult. Despite efforts by investigators and prosecutors, the precise purpose and use of these funds remain unknown. Meanwhile, former FTX CEO Sam Bankman-Fried is facing trial for his involvement in the collapse of the exchange, further complicating the situation. The movement of the stolen ETH highlights the ongoing battle between cybercriminals and the crypto community.
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