In a puzzling turn of events, the unidentified hacker responsible for the massive FTX breach has been making increasingly bold moves with the stolen funds, all while leveraging the ongoing trial of Sam Bankman-Fried (SBF) as a convenient smokescreen. Speculations are rife that this hacker, who siphoned over $400 million from FTX and FTX US in November, is using the media circus surrounding SBF’s trial to conceal their illicit activities. Hugh Brooks, the director of security operations at CertiK, has raised this alarming possibility.
Shortly before the commencement of Bankman-Fried’s criminal trial, the elusive hacker, known only as “FTX Drainer,” initiated the transfer of millions of dollars in Ether, proceeds from the audacious November heist.
These suspicious transfers have persisted throughout the trial, with the hacker funneling approximately 15,000 ETH, equivalent to roughly $24 million, into three new wallet addresses over the last three days.
Brooks voiced his concerns, stating, “With the FTX trial garnering substantial public attention and media coverage, the perpetrator behind the fund-draining operation may be feeling an intensified need to shroud their assets.”
The FTX exchange, once valued at a staggering $32 billion, succumbed to bankruptcy on November 11. On the same fateful day, FTX employees began noticing alarming withdrawals from the exchange’s wallets.
A report published on October 9 by Wired provides fresh insights into the night of the breach. Once FTX’s team discovered that the hacker had complete access to a series of wallets, panic ensued, with the realization that “the fox was in the henhouse.” A race against time began to safeguard the remaining funds from falling into the hacker’s grasp.
In a dramatic move, the team decided to transfer a colossal sum, estimated between $400 and $500 million, to a privately owned Ledger cold wallet while awaiting instructions from BitGo, the company responsible for safeguarding the exchange’s assets after bankruptcy.
This strategic move likely thwarted the hacker’s attempts to seize a staggering $1 billion during the breach.
In the midst of these developments, Brooks disclosed that the hacker seems to have altered their tactics for obfuscating the illicit funds. On November 21, the FTX hacker was observed attempting to launder the funds using a “peel chain” method. This method involved gradually transferring funds to new wallets and peeling off smaller sums into fresh wallets.
However, the hacker has since evolved their strategy, adopting a more sophisticated approach to obscure the flow of the ill-gotten assets, according to Brooks. The funds initially held in the Bitcoin wallet are now spread across multiple wallets, with smaller portions being moved to a series of additional wallets. This tactic significantly complicates the tracing process and prolongs efforts to identify the culprits.
To date, no individuals or groups responsible for the FTX hack have been positively identified, and investigations into this audacious breach are ongoing.
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