FTX Thief Cashes Out Millions During Bankman-Fried Trial - Slashdot

Posted by BeauHD

on Saturday October 14, 2023 @09:00AM from the unusual-activity dept.

An anonymous reader quotes a report from the BBC: A thief who stole more than $470 million in cryptocurrency when FTX crashed is trying to cash it out while the exchange's founder is on trial. Sam Bankman-Fried's high-profile court case began last week. The former crypto mogul denies fraud. After lying dormant for nine months, experts say $20 million of the stolen stash is being laundered into traditional money every day. New analysis shows how the mystery thief is trying to hide their tracks. [...] On the day FTX collapsed, hundreds of millions of dollars of cryptocurrency controlled by the exchange were stolen by an unidentified thief that is believed to still have control of the funds. No one knows how the thief -- or thieves -- was able to get digital keys to FTX crypto wallets, but it is thought it was either an insider or a hacker who was able to steal the information. The criminal moved 9,500 Ethereum coins, then worth $15.5 million, from a wallet belonging to FTX, to a new wallet. Over the next few hours, hundreds of other cryptoassets were taken from the company's wallets, in transactions eventually totaling $477 million.

According to researchers from Elliptic, a cryptocurrency investigation firm, the thief lost more than $100 million in the weeks following the hack as some was frozen or lost in processing fees as they frantically moved the funds around to evade capture. But by December around $70 million was successfully sent to a cryptocurrency mixer -- a criminal service used to launder Bitcoin, making it difficult to trace. [...] Although mixers make it difficult to trace Bitcoin, Elliptic was able to follow a small amount of the funds -- $4 million -- that was sent to an exchange. The rest of the stolen FTX stash -- around $230 million -- remained untouched until 30 September -- the weekend before Mr Bankman-Fried's trial began. Nearly every day since then chunks worth millions have been sent to a mixer for laundering and then presumably cashing out. Elliptic has been able to trace $54 million of Bitcoin being sent to the Sinbad mixer after which the trail has gone cold for now. "Crypto launderers have been known to wait for years to move and cash out assets once public attention has dissipated, but in this case they have begun to move just as the world's attention is once again directed towards FTX and the events of November 2022," said Tom Robinson, Elliptic's co-founder.