Bankman-Fried trial: FTX thief cashes out millions

Bankman-Fried trial

FTX thief cashes out millions during Bankman-Fried trial.

While the founder of the exchange is on trial, a criminal who stole over $470 million (£383 million) in Bitcoin when FTX failed is attempting to cash it out.

The high-profile legal case involving Sam Bankman-Fried started last week. Fraud is denied by the former crypto mogul.

Twenty million dollars a day, after remaining inactive for nine months, are allegedly being laundered into regular currency by specialists.

The mystery thief is attempting to cover their tracks, according to a new analysis.

One of the largest exchange platforms in the world at one point, FTX lets cryptocurrency investors purchase, sell, and store virtual money. On November 11, 2022, it filed for bankruptcy, claiming billions of dollars in unclaimed client payments.

While bankruptcy attorneys search for the missing billions, Mr. Bankman-Fried is entering a not-guilty plea to charges of abusing customer funds and money laundering.

The day FTX crashed, hundreds of millions of dollars worth of bitcoin under the exchange’s control were taken by an anonymous criminal who is allegedly still in possession of the money.

Nobody is certain how the thief or thieves obtained the digital keys to the FTX cryptocurrency wallets, but it is believed that the information was obtained by either an insider or a hacker.

The perpetrator transferred 9,500 Ethereum coins—worth $15.5 million at the time—from an FTX wallet to a new wallet.

Hundreds of additional crypto assets were removed from the company’s wallets over the course of the following few hours, with transactions eventually coming to $477 million.

Researchers from the cryptocurrency investigative business Elliptic claim that in the weeks that followed the hack, the criminal lost over $100 million because some of the money was frozen or lost to processing fees as they hurriedly moved the money around to avoid being caught.

But by December, over $70 million had been moved to an illicit firm known as a cryptocurrency mixer, which is used to launder Bitcoin and make it hard to track down.

Criminals run the risk of being discovered or having their money confiscated by cryptocurrency exchanges if they don’t use a mixing service to conceal the illegitimate source of their Bitcoin.

Through these exchanges, users can swap traditional money for cryptocurrencies like Ethereum and Bitcoin.

Even though mixers make it harder to track down Bitcoin, Elliptic managed to track $4 million of the money that was transferred to an exchange.

The remaining $230 million from the pilfered FTX cache was not touched until September 30, the weekend before Mr. Bankman-trial Fried’s started.

Since then, millions of dollars worth of chunks have been delivered to a mixer for money laundering and, most likely, cashing out almost every day.

Elliptic managed to track $54 million worth of Bitcoin that was sent to the Sinbad mixer, but as of right moment, the trail has dried up.

According to experts, the conduct is unusual and deviates from what is often done by Bitcoin thieves and hackers.

“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, co-founder of Elliptic.

Tracing the funds revealed another discovery that would indicate a connection to Russian cybercrime.

A wallet that is known to be used by criminal organizations with ties to Russia is where part of the stolen Bitcoin that was successfully laundered last year was found. This may indicate the presence of a broker or other middleman with ties to Russia, according to Elliptic.

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