Cryptocurrency always it offered a strange mix of trials and tribulations to anyone trying to steal it. As a digital currency, held in billions of dollars in hackable networks, connected to the Internet, it provides a financial target. But when stolen, the blockchains that almost all cryptocurrencies are built on make it possible to track the movement of the money and, in many cases, identify the thieves. So after a major hack siphoned nearly half a billion dollars from a collapsing cryptocurrency exchange yesterday, investigators around the world are keeping a close eye on where the hack ends — and looking for clues to identify the thief. Internal FTX or random access.
On Friday, hours after the main cryptocurrency exchange FTX filed for bankruptcy because of its epic, 10-figure fall, FTX’s remaining funds had poured more than $663 million worth of cryptocurrency, much of which appears to have been stolen. “FTX has been stolen,” wrote an administrator in the FTX Telegram channel. “FTX software is malware. Delete it.” Exactly how FTX could have been breached – and whether its software was compromised – is unclear, and FTX has not announced any breaches. But the company’s chief consultant in the US wrote in a tweet that “unauthorized access to other resources has occurred.” (FTX did not respond to WIRED’s request for comment.)
Soon after, the crypto-tracing and blockchain research company Elliptic revealed that the outflow of $663 million appears to be a combination of FTX moving money into its wallets and a mysterious theft. According to Elliptic, as much as $477 million of the money appears to have been stolen, although another crypto research firm, TRM Labs, puts the figure at $338 million. Twenty-four hours after the birth, a lot of money went into just a few crypto-currency addresses—where all the crypto-tracing companies, a large group of crypto amateurs, and no doubt the world’s law enforcement agencies are now all. staring with unblinking eyes.
This visibility, of FTX coins and other hidden cryptocurrencies, poses a serious problem for any thief who is trying to extract their money from traditional currencies. In this case, when the authorities and the army of creditors are looking for any sign that the employees or owners of FTX may be guilty, it may help to confirm that the insiders are the ones who stole it – or rather it shows that external hackers took advantage of it. chaos at FTX to remove the theft.
“We’re seeing these financial flows,” said Chris Janczewski, director of research at TRM Labs and a former special agent in charge of the IRS’s investigative division. “This thief has hundreds of millions of dollars. But it’s like he went into the bank, took out as much money as he could carry, and then the paint packets left. He has all this money, but now everyone knows about this bank robbery. What can you do about it?”
According to the analysis of Elliptic, at least $220 million of stolen money in the form of various cryptocurrencies was quickly sold through the execution of a decentralized-trading platform that allows users to exchange money without giving more information-turning them into cryptocurrencies ether and dai. But extracting that money and other stolen goods may require trading them on a centralized exchange, which always requires users to provide information. Thieves may try to put the money through a “mixing service” that launders the money by mixing it with other people’s money. But blockchain crypto-tracing experts have proven that they can often beat the odds—especially when users are feeding large sums of money. And some mixers, such as the Tornado Cash project that was approved by the US Treasury in August, make the cryptocurrency less sensitive to large exchanges or capture.