After FTX went bankrupt, a hacker managed to steal all of the exchange’s remaining funds. After exchanging all stolen assets for Ether (ETH), this became the 36th largest whale with around 229,000 ETH.
Hacker’s wallet is the 27th largest holder of ETH
Cryptocurrency exchange FTX, which filed for Chapter 11 bankruptcy under the US Bankruptcy Act, came under a massive attack over the weekend following its announcement. Hundreds of millions of dollars have been stolen directly from user accounts.
Of the $477 million allegedly stolen, about $186 million was transferred from FTX to secure storage wallets, according to specialist firm Elliptic. The rest is kept in the hacker’s wallet.
According to data on the chain retweeted by Beosin Alert, the hacker has traded most of his cryptocurrency holdings for ether (ETH). He now holds 228,523 ETH, worth approximately $288.8 million at the time of writing.
At the time of the hack, the loot made the hacker the 36th largest whale on ETH. Over the past few days, the hacker has made several trades between different blockchains. It appears that he was doing arbitrage, with some of his trades raising over 100 ETH. He now sits in 27th place, potentially making the top 25 thanks to good asset management.
However, it would be inaccurate to assume that the hacker is actually one of the largest holders of Ethereum on the network. Most institutional investors or influencers spread their holdings across many portfolios to increase their resilience against potential attacks and scams.
For the foreseeable future, the FTX platform hacker will have no choice but to somehow launder the money so that it can be exchanged for fiat currency in the future, which is why its place among the biggest whales in the Ethereum network should be temporary .
Do we know the identity of the hacker?
Some of the stolen cryptocurrencies have resurfaced on the reputable Kraken exchange. The exchange also claimed to have discovered the identity of the hackers. The thief went through a Kraken account that was verified by the KYC (Know Your Customer) process. The hacker then converted some of his winnings into other cryptocurrencies, including ether.
Unsurprisingly, many former FTX employees speculated that Sam Bankman-Fried or his close associates were behind the operation. In conversations with Vox reporters, the former billionaire denied being behind the transfers. Instead, he believes that the attack was launched by a former FTX employee.
In an official filing to the U.S. court, John Ray, a bankruptcy attorney for FTX, revealed that SBF was acting under orders from authorities in the Bahamas, where the exchange is headquartered. FTX co-founder Gary Wang helped him with the operation. The lawyers handling the case said they had credible evidence.
The Bahamas Securities Commission, the body responsible for financial regulation in the Bahamas, has allegedly asked the founders of FTX to withdraw their funds from the platform. During the attack, Sam Bankman-Fried was actually arrested by island authorities for questioning, as was Gary Wang.
Under the eyes of the authorities, the two accomplices stole part of the funds from the FTX empire and handed them over to justice in the Bahamas. Before going bankrupt, the duo allegedly relied on hidden backdoors in the platform’s code.
In an official statement, Bahamian regulators quickly confirmed they were behind the attack. The group revealed that it has only recovered funds tied to FTX Digital Markets, the Bahamian branch of the FTX empire.