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| Hackers start laundering huge amounts of money stolen from the FTX exchange |
Hackers stole about $477 million in cryptocurrency from the crashing FTX exchange and began laundering bitcoin money.
FTX's new CEO, John Ray, said earlier this month after the exchange filed for bankruptcy that "unauthorized access to certain assets has occurred."
Blockchain analysis firm Elliptic estimates that around $477 million in cryptocurrency has been stolen from FTX.
The theft is another blow to FTX, which was once one of the largest cryptocurrency empires with a market capitalization of $32 billion, and its collapse has sent shockwaves through the cryptocurrency industry.
According to public blockchain records linked to the hacked accounts, the stolen funds were diverted into several cryptocurrencies, but most of them — $280 million in total — were diverted into cryptocurrency ether.
Elliptic co-founder Tom Robinson told CNBC that hackers are using the RenBridge app to convert ether into a crypto product called RenBTC, which is then converted into Bitcoin. This process allows the conversion of one cryptocurrency into another without going through a central exchange.
“This is a common money laundering tactic for cryptocurrency theft,” said Robinson.
Elliptic researchers documented how the RenBridge app was used to launder hundreds of millions of dollars in cryptocurrency through ransomware or hack attacks. According to Elliptic, some of these hackers have ties to Russian-backed ransomware groups.
On November 11, FTX users noticed unusual cryptocurrency transfers, sparking fears of a hack on the exchange. User messages on Telegram indicate that the FTX app and platform have been hacked.
It is believed that hackers will eventually be able to convert these digital currencies into real money. However, given the traceability of cryptocurrencies, Robinson sees this as a challenge. He said he expects hackers to use "mixers" to obfuscate their paths to the blockchain.
A mixer, Robinson said, is a service or software that obfuscates the path of crypto transactions on the blockchain, making it difficult or impossible to trace those funds. “This may be one of the reasons why these assets are moving to bitcoin, and there are so many bitcoin mixing services out there,” he added.
For its part, FTX on Sunday urged cryptocurrency exchanges to keep an eye on stolen funds when hackers try to launder money through one of their services. “The exchanges must take every step to ensure that these funds are returned to the holding,” FTX said in another tweet.
According to court documents, FTX owes its main creditors approximately $3.1 billion, which means that the stolen funds represent only 15% of the amount that FTX owes to its main clients.