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FTX Hacker Remains at Large, Moving Millions in ETH Before SBF Trial

Last Updated October 2, 2023 3:08 PM
James Morales
Last Updated October 2, 2023 3:08 PM
Key Takeaways
  • A crypto wallet holding funds drained from FTX has awakened.
  • Over the weekend, 15,000 ETH held in the wallet was transferred to ThorChain and Railgun.
  • The identity of the FTX exploiter remains unknown.

A crypto wallet holding 15,000 ETH, siphoned from the FTX exchange as it collapsed last November, recently transferred funds to the Thorchain bridge and the Railgun privacy wallet.

While the identity of the wallet’s owner remains unknown, the timing of the latest transactions only adds to the mystery, having occurred just as FTX founder Sam Bankman-Fried (SBF) prepares to go on trial for fraud charges on Tuesday, October 3.

Cyber Attack or Inside Job? FTX Theft Remains Shrouded in Mystery

In November 2022, amid the chaos of its collapse, hackers drained hundreds of millions of dollars worth of crypto assets from FTX wallets.

Although an initial post in the FTX telegram channel had described the transfer as a hack, the official narrative soon changed its phrasing to “unauthorized access,” leaving open the possibility that an insider with control of FTX wallets could have orchestrated the transfers.

To further complicate matters, a total breakdown of trust between FTX’s bankruptcy lawyers and Bahamian authorities makes it hard to rule out the possibility that an FTX employee moved funds at the request of law enforcement.

In messages reported  by Vox, Bankman-Fried himself said that the funds were either hacked by an ex-employee or via malware on an FTX computer. 

SBF Trial Could Reveal New Information

While the administrators of the FTX estate have remained largely silent on their efforts to recover lost funds, with Bankman-Fried’s fraud trial due to begin on Tuesday, jurors may soon gain some insight into the chaotic events that surrounded the exchange’s collapse in November 2022.

For example, several senior executives are likely to testify against SBF. With former FTX Chief Technology Officer, Gary Wang, former FTX Head of Engineering, Nishad Singh, and former Alameda Research CEO, Caroline Ellisonny, potentially gearing up to take the stand, new information may soon come to light.

ThorChain Emerging as Favored Money Laundering Tool

One notable aspect of the recent transfers  from the FTX drainer’s wallet is that they sent a large bulk of the funds to ThorChain and RailGun.

The former is a decentralized cross-chain liquidity protocol that allows users to swap assets between blockchain networks. RailGun is a privacy-focused crypto wallet service that lets users store and use tokens while hiding transactions from the public eye.

According to one blockchain analyst, thieves have made off with more than half of the ETH to BTC swaps facilitated by the ThorSwap router in the last four months.

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