April 19, 2024
Elliptic Suggests Russian Connection to FTX Exchange Hacker
Latest Cryptocurrency News

Elliptic Suggests Russian Connection to FTX Exchange Hacker

According to blockchain monitoring company Elliptic, there is now a “stronger possibility” that the unknown hacker who attacked the defunct cryptocurrency exchange FTX was connected to Russia.

To begin with, the idea that Sam Bankman-Fried, the creator of FTX, misappropriated the money, is called into question by the fact that money was transferred while he was testifying in a Manhattan courtroom.

“At 3:41 p.m. EST on October 4th, 2023, $15 million of the stolen crypto was moved—at which time Bankman-Fried was reportedly in court without internet access,” Elliptic stated in a blog post.

The business released a chronology on Thursday outlining the on-chain movements of the hacker’s stolen money. Since the attack, a large portion of the profits have been transferred to Bitcoin and transferred through ChipMixer, an unauthorized Bitcoin privacy mixer that the Justice Department shut down earlier this year.

“Of the stolen assets that can be traced through ChipMixer, significant amounts are combined with funds from Russia-linked criminal groups, including ransomware gangs and darknet markets, before being sent to exchanges,” stated Elliptic. “This points to the involvement of a broker or other intermediary with a nexus in Russia.”

The exchange lost 9,500 Ethereum (ETH) to a still-unidentified hacker on the same day that FTX declared bankruptcy in November of last year. The hacker moved their funds from one of FTX’s wallets to a new address. Pax Gold (PAXG), Tether (USDT), Wrapped Bitcoin (WBTC), and other digital assets worth $477 million were later claimed by the hacker.

While some assets were temporarily blocked to comply with regulations, the majority were successfully exchanged for different cryptocurrencies and connected to several blockchains in the days that followed.

“This helps to break the blockchain trail, making it more difficult to trace funds, as well as providing access to services on blockchains that facilitate further laundering,” stated Elliptic.

Hackers used RenBridge on November 20 to convert 65,000 ETH to Bitcoin, of which many were later transmitted to ChipMixer. Ironically, Alameda Research, which shared a balance sheet with the compromised FTX exchange, controlled RenBridge.

Another 72,500 ETH ($120 million) were moved to Bitcoin via THORSwap after a nine-month wait. However, the platform has subsequently disabled its interface because of concerns about money laundering. Much of that money was mixed through Sinbad after ChipMixer was shut down, which Elliptic thinks is a rebranded version of Blender, a mixer that the U.S. Treasury Department shut down for helping the North Korean Lazarus Group.

Despite the link, Elliptic doesn’t think Lazarus is responsible for the FTX attack owing to the latter’s more “basic” money laundering techniques than the former.

Image: Wallpapers.com

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