Russian Connection Found in FTX Hack
In the midst of FTX’s legal troubles and revelations about its founder, Sam Bankman-Fried, a Russian connection has been discovered in the trail of stolen funds from the exchange.
FTX filed for bankruptcy on November 11, 2022, and was subsequently hacked for $477 million.
Possible Russian-Linked Actor Behind Heist
After the hack, the majority of the stolen funds remained inactive for five days. Then, around $100 million worth of ether (ETH) was moved to the Bitcoin blockchain using RenBridge.
The perpetrators then used a mixer to convert approximately 4,536 bitcoins into cash. Out of that amount, around 2,849 BTC was sent through a mixer called ChipMixer. Some of this money ended up on crypto exchanges.
FTX staff and bankruptcy advisors managed to protect over $300 million in assets before the thief could access them. However, it is believed that the hackers could have taken more if not for their swift action.
Russian Affiliation and Involvement
According to blockchain intelligence firm Elliptic, there is evidence suggesting a Russia-linked actor’s involvement in the theft. The stolen funds appear to be mixed with money from Russian-affiliated criminal organizations before being transferred to cryptocurrency exchanges.
This indicates the possible role of an intermediary with ties to Russia, such as a broker.
It is also noteworthy that a significant portion of the stolen funds remained inactive until just before Bankman-Fried’s trial began. This is unusual as crypto money launderers typically wait years before transferring and liquidating their assets when public interest has subsided.
Possible Suspects and Lax Security Practices
Elliptic has raised suspicions about FTX employees who may have had access to the exchange’s crypto assets and could have stolen them for operational reasons.
Bankman-Fried himself is a person of interest, although his limited internet access would have made it difficult for him to launder the funds.
The lax security practices of FTX may have also facilitated the theft by an external party. Private keys granting access to the company’s crypto assets were stored without encryption, and inadequate security measures led to the loss of over $150 million from Alameda Research.
The use of the Sinbad mixer could suggest the involvement of North Korea’s Lazarus Group, known for large-scale digital asset heists. However, the laundering methods used in this case are less sophisticated compared to Lazarus Group’s typical tactics.
Hot Take: Russian Connection Unveiled in FTX Hack
The unraveling of FTX and its founder’s legal troubles has revealed astonishing details about the theft that led to the exchange’s downfall. The stolen funds from FTX have been found to have a connection to Russia, with evidence pointing to a Russia-linked actor’s involvement. The funds were mixed with money from Russian-affiliated criminal organizations before being transferred to cryptocurrency exchanges. This suggests the possible role of an intermediary with ties to Russia. Additionally, suspicions have been raised about FTX employees and lax security practices that may have facilitated the theft. While the involvement of North Korea’s Lazarus Group has been considered, the laundering methods used in this case are less sophisticated than their typical tactics.
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