CertiK Unveils the Potential of SBF Trial as a Crypto Security Smokescreen

Crypto Hackers Targeting FTX

Hugh Brooks, the director of security operations for CertiK, believes that the FTX hacker, or “FTX Drainer,” may be using the buzz around Sam Bankman-Fried’s fraud trial to further hide the $400 million they stole in November.

In the days leading up to Bankman-Fried’s criminal trial, the hacker began transferring Etherit, worth roughly $24 million, to three new wallets. Since then, the movements have continued throughout the trial.

“The crypto hack has gained significant attention from the media, and this could be motivating the hacker to conceal their assets even more,” Brooks stated.

Crypto Hack Shakes FTX Exchange

On Nov. 11, FTX, once valued at $32 billion, declared bankruptcy. That same day, employees noticed massive withdrawals of funds from the exchange’s wallets – a clear sign of a crypto hack.

According to an Oct. 9 report from Wired, the attacker had complete access to a series of wallets, prompting the FTX team to declare that “the fox [was] in the hen house” and scramble to protect the remaining funds.

The team reportedly transferred between $400 and $500 million to a privately owned Ledger cold wallet, while waiting for a response from BitGo, the company tasked with taking custody of the exchange’s assets post-bankruptcy.

Crypto Security Breach and Laundering Attempts

The move likely prevented the attacker from gaining a full $1 billion in the raid, according to FTX AI.

Meanwhile, Brooks explained that the hacker appears to have changed its method for obscuring funds. On Nov. 21, the FTX hacker was observed attempting to launder funds by using a “peel chain” method, which involves sending decreasing amounts of funds to new crypto wallets and “peeling” off smaller amounts to new crypto wallets.

However, the hacker has recently been using a more sophisticated crypto method to obscure the transfer of the illicit assets, said Brooks. This includes crypto sell offs, crypto media events, and crypto regulation in the US for the month of November 2021, potentially involving a crypto company.

The funds stored in the original Bitcoin wallet have been distributed through multiple wallets, transferring smaller divisions of funds to a series of additional wallets, a tactic that “considerably prolongs” the tracing process. Despite the FTX crypto hack, Brooks said they have yet to identify any individuals or groups that could be behind it, and investigations are still ongoing.

The crypto sell off in the markets, as well as the crypto media coverage of the event, have raised several questions about crypto security and the need for better crypto regulation in the US. The crypto events of November 2021 could be a turning point for the crypto company, as the chain crypto security could be improved.