After FTX went bankrupt, a hacker managed to steal all the remaining funds of the exchange. After exchanging all stolen assets for Ether (ETH), this became the 36th largest whale with around 229,000 ETH.
Hacker Wallet is the 27th largest holder of ETH
Cryptocurrency exchange FTX, which filed for Chapter 11 bankruptcy under US bankruptcy law, suffered a massive hack 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 escrow wallets, according to specialist firm Elliptic. The rest is kept in the hacker’s wallet.
According to on-chain data updated by Beosin Alert, the hacker traded most of his cryptocurrency holdings for ether (ETH). He now holds 228,523 ETH, worth about $288.8 million at the time of writing.
At the time of retaliation, the loot made the hacker the 36th largest whale on ETH. Over the past few days, the hacker has made several exchanges between different blockchains. It looks like he was doing arbitrage, with some of his trades raising over 100 ETH. It now sits at 27th, potentially breaking into the top 25 thanks to good asset management.
However, it would be incorrect 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 multiple portfolios to increase their resilience against potential attacks and fraud.
For the foreseeable future, the hacker of the FTX platform will have no choice but to launder the money in some way so that it can be exchanged for fiat currency in the future, hence his place among the biggest whales on the network Ethereum must be temporary.
Do we know the identity of the hacker?
Some of the stolen cryptocurrencies have resurfaced on the reputable exchange Kraken. The exchange also claimed to have revealed the identity of the hackers. The thief went through a Kraken account 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 journalists, the former billionaire denied being behind the transfers. Instead, he believes the attack was launched by a former FTX employee.
In an official US court filing, John Ray, a lawyer handling FTX’s bankruptcy proceedings, revealed that SBF acted at the behest of authorities in the Bahamas, where the exchange is headquartered. FTX co-founder Gary Wang helped him with the operation. Lawyers handling the case said they had credible evidence.
The Bahamas Securities Commission, the body responsible for financial regulation in the Bahamas, has reportedly asked the founders of FTX to withdraw their funds from the platform. During the hack, Sam Bankman-Fried was indeed detained by the island authorities for questioning, as was Gary Wang.
Under the watchful eyes of the authorities, the two associates embezzled some of the funds from the FTX empire and turned them over to the Bahamian justice system. Before the bankruptcy, the pair were apparently relying on hidden backdoors in the platform’s code.
In an official statement, Bahamian regulators quickly confirmed that they were behind the hack. The group disclosed that it only recovered funds linked to FTX Digital Markets, the Bahamian arm of the FTX empire.