Good day everyone,
I hope you are all well and having excellent day, welcome to CryptoGod-1’s blog on all things crypto. The infamous claimed hack on FTX last year saw thousands of crypto tokens stolen, and interestingly 22,500 ETH have recently been moved.
FTX Hack 2022
Back in November 2022 the crypto giant FTX was reportedly hacked, with around $600 million in cryptocurrencies exploited just mere hours after the company had filed for bankruptcy. As part of the hack, 180,000 ETH coins, which were worth around $200 million at the time, were sent to at least a dozen different digital wallets. While the hack was taking place, the company was in the process of moving assets to cold wallets and more secure storage options.
The attacker was not identified, but after draining and swapping the assets for ETH, they became one of the biggest holders of the second-largest cryptocurrency by market value at the time. A week later, on the 20th of November 2022, the hacker began to convert the ETH into another crypto known as RenBTC. The funds would be sent to the bitcoin blockchain through the RenBridge service, which had recently been acquired by Alameda Research and was known as a service for laundering hundreds of millions of dollars worth of crypto, including assets believed to have been stolen by North Korea.
Arkham Intelligence noted via its analysts that the hackers moves followed two distinct patterns: operating between 08:00 and 10:00 UTC and generating a new account for each operation. The CEO of Arkham, Miguel Morel, had noted prior that the exploiter does not appear to be very sophisticated.
“They've hastily tried to do whatever they can with the funds, seemingly without much of a plan.”
The overwhelming feeling of the hacker being a high-level insider was rife amongst the crypto community. The blockchain security firm Hacken noted that the transactions by the hacker had left some clues regarding their identity. They noted that during the hack the attacker had initially tried to sent USDT on the Tron blockchain, but after multiple failed attempts realised they did not have the required TRX to pay for transaction fees. The attacker then decided to sent 500 TRX from their own verified personal account on crypto exchange Kraken to the compromised wallet address.
Kraken makes use of “know-your-customer” or KYC measures, which is done as part of anti-money-laundering compliance requirements, which means the exchange were aware of the personal information and identity of the person who sent the TRX. Nick Percoco, chief security officer of crypto exchange Kraken, noted in a tweet that they were aware of the users identity. He also added that FTX or the exchange’s founder and former chief executive, SBF, would release an official statement.
Speculation on Twitter at the time suspected it was SBF or someone from his close circle behind the exploit. This became plausible, especially given the access to the cold wallets.
It was noted by Kraken that the exchange was in contact with law enforcement, and had frozen Kraken account access to certain funds suspected to be associated with ‘fraud, negligence or misconduct’ related to FTX.
It is also important to consider the fact the hacker could be sophisticated, and made use of the Kraken account to mislead authorities. According to blockchain sleuth Cryptogle:
“It’s very common for a scammer to use a fake KYC (know-your-customer) account so that authorities go chasing the wrong person.”
The hack led to a US Justice Department investigation which aimed to uncover the individual or group responsible for the hack, although their identity remains unknown. SBF did allude to his belief of an insider or former employee, or another malicious actor, having gained access to the crypto wallet keys.
2023 Transactions
As recently as Monday the 2nd of October saw a transaction of 7,500 ETH, or $12.4 million by the hacker or group of hackers believed to be behind the 2022 hack.
A total of 22,500 ETH has been moved, equating to about $37 million in todays values.
With the impending trial of SBF on charges of fraud and money laundering, the moves could quite easily be linked. It is likely the ETH is being moved in a bragging move, or perhaps it is just a predesignated time.
SBF faces more than 100 years in prison if found guilty on all counts.
Have a great day.
Peace. CryptoGod-1.
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