The hacker behind the bankruptcy of cryptocurrency exchange FTX began transferring his holdings of Ether (ETH) to a new wallet address on November 20. Drying the FTX wallet was the 27th largest holder of ETH after the hack, but it fell by 10 positions after dumping ETH over the weekend.
The FTX hacker drained nearly $447 million from several global FTX and US FTX exchange wallets just hours after the cryptocurrency exchange filed for Chapter 11 bankruptcy on November 11. .
On November 20, wallet drainer 1 FTX transferred 50,000 ETH to a new address, 0x866E. Then, the new wallet address replaced ETH with renBTC (ERC-20 version of BTC) and linked it to two wallets on the Bitcoin blockchain. One of the bc1qvd…gpedg wallets holds 1,070 renBTC while another bc1qa…n0702 wallet holds 2,444 renBTC.
Crypto analytics group CertiK later tracked renBTC at address bc1qvd… gpedg and found that the address used a money laundering technique called peel chain to launder renBTC.
Peel Chain is a technology for laundering a large amount of cryptocurrency through a long chain of small transactions. A small “peeled” part of the topic title in low conversion value. This increased laundered money is often transferred to exchanges where it can be converted into fiat currency or other crypto assets.
Related: FTX hacker is now the 35th largest holder of ETH
At the time of the FTX hack, there were two parties involved, a black hat who managed to drain $447 million and a white hat who managed to move $186 million of FTX assets into cold storage. However, when the Bahamas Securities and Exchange Commission issued a notice indicating that they were attempting to transfer assets from FTX, it caught many people by surprise, with many claiming that the securities regulator was, in fact, the black hat behind the exploit.
On-chain analyst ZachXBT highlighted the black hat wallet’s token transfer pattern and said that the wallet was dumping tokens and bridging tokens intermittently was a very different behavior than other addresses that pulled out of FTX and instead sent to multisig on chains like Ethereum or Tron.
Given the movement of funds and the techniques involved in transferring these funds, it is unlikely that the FTX 1 wallet drainer would be under the control of the Bahamas government based on current chain activity. The BTC activity is consistent with chain peeling, a form of money laundering that would be very unusual for a government agency.