+34
Mysterious crooks took hundreds of millions of dollars from FTX just as it collapsed. Crypto-tracing blockchain analysis may provide an answer.
offered a strange mix of temptations and challenges for anyone trying to steal it. As digital cash, held in multibillion-dollar sums on hackable, internet-connected networks, it presents a lucrative target.
But once it's stolen, the blockchains that almost every cryptocurrency is built on make it possible to follow that money's every movement and, very often, to identify the thieves. So after a massive heist pulled nearly half a billion dollars worth of funds out of theyesterday, the world's crypto tracers are now closely tracking where that loot ends up—and looking for any clues that reveal the thief to be an FTX insider or just an opportunistic hacker. On Friday, hours after the major cryptocurrency exchange FTX had filed for bankruptcy in the wake of its epic, 10-figure collapse, FTX's remaining funds were drained of more than $663 million worth of cryptocurrency, much of which appears to have been stolen. "FTX has been hacked," wrote an administrator in FTX's Telegram channel. "FTX apps are malware. Delete them." Exactly how FTX might have been breached—and whether its apps are, in fact, compromised—is far from clear, and FTX hasn't officially announced any theft. But the company's US general counsel wrote in aSoon, crypto-tracing and blockchain analysis firmthat the $663 million outflow seemed to be a combination of FTX's movement of coins into its own storage wallets and a mysterious theft. According to Elliptic, fully $477 million of the funds appear to have been stolen, though another crypto-tracing firm,. Twenty-four hours after the theft, most of that money had moved into just a handful of cryptocurrency addresses—where the entire cryptocurrency tracing industry, a vast community of amateur crypto sleuths, and no doubt law enforcement agencies around the globe are now all watching it with an unblinking gaze. That observability, for the FTX funds and for other stashes of stolen crypto, presents a serious challenge for any thief trying to cash out their haul into traditional currency. In this case, where regulators and an army of aggrieved creditors are looking for any sign that FTX's staff or owners may themselves be the culprits, it could ultimately help confirm that insiders were responsible for the theft—or instead show that external hackers took advantage of the chaos at FTX to pull off a burglary. "We’re definitely watching the movements of these funds," says Chris Janczewski, the head of investigations at TRM Labs and a former special agent at the IRS's criminal investigations division. "This potential thief has hundreds of millions of dollars. But it's like they went into a bank, took as much cash as they could carry, and then the dye packs went off. They've got all this money, but now everyone knows it's connected to this bank robbery. What can you actually do with it?" According to Elliptic's analysis, at least $220 million of funds stolen in the form of a variety of cryptocurrencies were quickly traded through decentralized exchanges—trading platforms that allow users to swap coins without giving identifying information—to convert them into the cryptocurrencies Ethereum and Dai. But cashing out those coins and the rest of the stolen loot will likely require trading it on a centralized exchange, which almost always requires users to hand over identifying information. The thieves may try to put the money through a "mixing" service that launders the coins by blending them with those of other users. But crypto-tracing blockchain analysts have proven they can often defeat those mixers—particularly when users are feeding very large sums into them. And some mixers, like the Tornado Cash service that was
Scratch the next story
United States Latest News, United States Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
FTX, FTX US and Alameda will file for Chapter 11 bankruptcy in US; SBF resignsFTX said roughly 130 companies in FTX Group — including FTX Trading, FTX US and Alameda Research — had started proceedings to file for bankruptcy in the United States.
Read more »
'FTX Has Been Hacked': Crypto Disaster Worsens as Exchange Sees Mysterious Outflows Exceeding $600MThe FTX_Official disaster worsens as a hack appears to drain hundreds of millions of dollars from the once-mighty cryptocurrency exchange, hours after its bankruptcy filing. cheyenneligon thesamreynolds skesslr nikhileshde report
Read more »
What a $32B crypto company's bankruptcy means for future of digital currencyWhat a $32 billion crypto company's bankruptcy means for future of digital currency
Read more »
FTX CEO John Ray Confirms Late-Night Hack, Says Company Is Working With Law EnforcementNew FTX_Official CEO John Ray said the company is “in contact with, and are coordinating with law enforcement and relevant regulators” after last night’s hack. cheyenneligon reports
Read more »
Jump Crypto says it remains 'well capitalized' following FTX downfallJump Trading’s crypto arm weighed in on the FTX crisis and its impact on Jump Crypto.
Read more »