FTX hacker is now 35th largest ETH holder

Speculation abounds as to true identity of FTX hacker

Hack                                 
Cryptocurrency hacker - Photo:Shutterstock
                                

The hacker who attacked the cryptocurrency exchange FTX while it was in the midst of collapse is now one of the largest holders of Ethereum (ETH), at around $277m. 

Within 24 hours of FTX filing for Chapter 11 bankruptcy in the United States, more than $663m (£558m) was drained from FTX’s wallets. 

According to the blockchain analytics and intelligence firm Elliptic, $477m of this figure is suspected to have been stolen, while the remaining $186m was moved into secure storage by FTX itself.

On Tuesday, the wallet linked with the suspected hack swapped around $49m of stablecoins, predominantly Dai, for Ethereum. This raised the alleged hacker’s total Ethereum haul to 228,523 ETH, worth around $277m at the time of writing. The stockpile makes the hacker the 35th largest holder of Ethereum in the world. 

The identity of the hacker has remained a mystery. While some have suggested that the perpetrator could be an experienced group, others have postulated that a high-level FTX insider could be responsible. 

A number of FTX Tron accounts were identified and linked to the hack. Twitter users quickly noticed that the funds moved from these accounts were funded by a 499 TRX transaction from the cryptocurrency exchange Kraken to cover the fees. 

Kraken’s chief security officer, Nick Percoco, acknowledging the possible link, said: “We know the identity of the user.”

Percoco has not elaborated further. Should the account in question lead back to the hacker, it would lend credence to the argument advanced by some that the hack was carried out by a relative amateur.

Buterin weighs strengths and weaknesses of centralisation

Ethereum co-founder Vitalik Buterin has not commented directly on the FTX hacker and their substantial accumulation of Ethereum. However, he acknowledged on Wednesday that the past week had been very good for those believing in “the ‘centralised anything is evil by default, use defi and ‘self-custody’ ethos.”

Nevertheless, Buterin argued that absolute decentralisation also comes with risks including bugs in smart contract code. 

Ethereum traded down by 4.7% by 14:20 (UTC) on Wednesday, reaching $1,209. The cryptocurrency company’s market capitalisation has fallen by two thirds from $440bn at the start of the year to $148bn.

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