Blockchain Intelligence Firm Elliptic Reveals Insights into FTX Theft
A recent report by blockchain intelligence firm Elliptic has provided a detailed analysis of the FTX theft, uncovering the complex series of events surrounding the hack, subsequent money laundering, and the ongoing search for the culprits. The report highlights the sophisticated techniques used to move and conceal stolen assets worth millions of dollars.
Examining the FTX Hack
The FTX theft occurred in November 2022 when $477 million was stolen from the Bahamas-based cryptocurrency exchange. This incident coincided with FTX’s bankruptcy filing and the arrest and charges against its CEO, Sam Bankman-Fried.
Despite ongoing efforts, the identity of the thief behind the hack remains unknown as they continue to launder and transfer stolen assets on the blockchain. However, Elliptic’s investigation has shed light on the methods employed by the perpetrator.
Money Laundering Techniques Used
According to Elliptic’s report, the thief quickly engaged in a money laundering spree, utilizing decentralized exchanges (DEXs), cross-chain bridges, and mixers to obscure the trail of stolen funds.
The thief evaded detection by swapping stolen tokens for native assets like Ether (ETH) on DEXs such as Uniswap and PancakeSwap. This allowed them to bypass compliance departments that typically monitor centralized exchanges.
To further complicate tracking efforts, the stolen assets were moved across different blockchains using cross-chain bridges. Services like Multichain and Wormhole were leveraged to transfer assets from Binance Smart Chain and Solana blockchains to Ethereum.
Notably, RenBridge, a cross-chain bridge owned by Alameda Research (a sister company of FTX), facilitated the laundering of $74 million worth of stolen assets.
Bankruptcy’s Role in Internal Crypto Theft?
The stolen Ether was then converted to Bitcoin (BTC) using RenBridge, allowing the thief to utilize mixers. Mixers, including ChipMixer, were used to blend the stolen Bitcoin with funds belonging to others, effectively obscuring the origin of the assets.
However, ChipMixer was seized in an international law enforcement operation, prompting the thief to switch to Sinbad, a recently launched mixer associated with illicit activities.
While the exact identity of the thief remains unknown, Elliptic’s analysis suggests several possible scenarios. One possibility is an inside job involving individuals with access to FTX’s crypto assets taking advantage of the chaos surrounding the company’s bankruptcy. Another possibility is the involvement of a Russia-linked actor due to the combination of stolen assets with funds from Russian criminal groups during the laundering process.
Hot Take: Deliberate Timing and FTX’s Current Status
It is noteworthy that the stolen assets remained dormant for several months until just before Bankman-Fried’s trial in New York. Elliptic suggests that this deviation from the typical strategy of waiting years to move and cash out assets indicates a deliberate attempt to capitalize on renewed attention towards FTX and the events of November 2022.
As of now, FTX’s token FTT is trading at $1.0488, reflecting a 0.21% increase in the past 24 hours.
Featured image from Shutterstock, chart from TradingView.com
Source: [Bitcoinist](https://bitcoinist.com/elliptic-unravels-477-million-ftx-hack-money-laundering/)
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