FTX’s $477 Million Heist: A Trail of Blockchain Clues Unearthed

In the shrouded realm of blockchain, the FTX hack that transpired on November 11, 2022, stands as a glaring testament to the cryptic trails a nefarious act can leave behind. The Bahamas-based cryptocurrency exchange, FTX, fell prey to an unidentified hacker who made off with a staggering $477 million, plunging the exchange into bankruptcy. The maleficent actor was quick to take to the shadows, embarking on a quest to launder the stolen assets through a maze of decentralized exchanges (DEXs), cross-chain bridges, and mixers.

The pilfered assets witnessed a loss of $94 million in the ensuing days, as the thief hastily funneled them through various blockchain services. RenBridge, a service held by FTX’s sister company Alameda Research, saw $74 million of the stolen cache. Yet, the bulk of these pilfered assets lay dormant, only to stir again as the Bankman-Fried trial neared, suggesting a deliberate orchestration.

The FTX’s hacker initial modus operandi was to swap the stolen tokens for native assets, like Ether, to escape the clutches of centralized authorities. Employing DEXs like Uniswap and PancakeSwap, the thief could swap tokens without fear of seizure. This initial laundering act was the precursor to a more sophisticated ploy: cross-chain laundering. The hacker funneled assets through decentralized cross-chain bridges like Multichain and Wormhole, a tactic to obscure the assets’ trail and facilitate further laundering.

One notable accomplice in this cryptic narrative was RenBridge. The thief, having accumulated 245,000 ETH now worth around $306 million, utilized RenBridge to transfer 65,000 ETH to the Bitcoin blockchain, further muddying the trail. The sinister irony lies in the fact that RenBridge was operated by Alameda Research, a sister company to the beleaguered FTX.

Once the assets were safely harbored in the Bitcoin realm, the thief employed mixers like ChipMixer to cloak their transactions, a tactic often used to thwart tracing efforts. However, as time rolled on, law enforcement clamped down on ChipMixer, pushing the thief towards newer shores like Sinbad, a suspected rebranded version of the sanctioned Blender mixer.

Fast forward to September 30, 2023, the dormant assets awoke once more. The thief, adapting to the closing net, turned to THORSwap for laundering, converting a hefty sum of Ether to Bitcoin. THORSwap, however, soon suspended its interface to stem the illicit flow of funds, albeit to little avail as the thief continued to exploit the underlying THORChain bridge.

Despite the meticulous blockchain trails unraveled by Elliptic Research, the identity of the FTX’s hacker remains shrouded in mystery. Speculations range from an inside job, possibly implicating Sam Bankman-Fried, to external rogue actors linked to North Korea’s Lazarus Group or Russia-affiliated criminal networks. The saga of the FTX hack unveils a sinister dance on the blockchain, leaving in its wake a tale of obscure trails, elusive thieves, and the relentless march of illicit digital transactions.

The unfolding drama around the FTX hack serves as a stark reminder of the continuous evolution within the crypto laundering realm. As the law enforcement and compliance sectors refine their strategies, so do the criminal minds lurking within the blockchain’s cryptic maze. The “State of Cross-chain Crime” report by Elliptic unveils the latest typologies and trends in cross-chain criminality, shedding light on the ever-evolving tactics deployed by crypto launderers.

Image source: Shutterstock


Tagged : / / / / / / / / / / /

DOJ Targets SBF’s Jets for Forfeiture

According to a document that was submitted by the United States Department of Justice (DOJ) on October 4, 2023, two luxury aeroplanes worth several millions of dollars that are held by Samuel Bankman-Fried are now potentially vulnerable to forfeiture. The petition states that the foundation for the action to forfeit the property belongs to “offences described in Counts One through Four and Seven of Indictment 22 Cr. 673 (LAK)” committed by Bankman-Fried. Both a Bombardier Global 5000 BD-700-1A11 and an Embraer Legacy EMB-135BJ are named as the aircraft in question here.

Controversy Regarding Ownership It was revealed on September 21 in documents submitted to the United States Bankruptcy Court for the District of Delaware that the planes are at the centre of a controversy regarding ownership. The parties concerned are the federal government of the United States, FTX, and Island Air Capital, which is the aviation business that operates the planes. While the government maintains that the aircraft were acquired via the use of illegitimate finances, FTX is of the opinion that the loans that were used for the acquisition were not properly recorded.

The United States Commodity Futures Trading Commission (CFTC) initiated legal action against Bankman-Fried, FTX, and Alameda Research in the month of December 2022. The complaint claims that the defendants violated the Commodity Exchange Act and that Bankman-Fried exploited customer cash from FTX for personal expenses, including the purchase of private planes. Additionally, the lawsuit claims that the defendants violated the terms of their employment.

At this time, Bankman-Fried is on trial for several offences that are connected to the failure of FTX in November of 2022. The proceedings of the trial, which were presided over by Judge Lewis Kaplan, got underway on October 3, 2023 with the selection of the jury. On October 4th, the court heard opening statements in the case. In its opening statement, the Department of Justice (DOJ) depicted Bankman-Fried as intentionally misrepresenting clients and investors. In contrast, the defence contended that he is a young entrepreneur whose business ideas “didn’t work out.”

Image source: Shutterstock


Tagged : / / / / / / / / / /

Precedent Trial of SBF Engrosses Coinbase Executives as FTX Faces Judicial Scrutiny

On the morning of October 4, 2023, a significant legal event will unfold as Judge Kaplan begins the criminal trial against Sam Bankman-Fried (SBF), a name that has become synonymous with the crypto exchange FTX. The anticipation surrounding the trial has caught the attention of top executives at Coinbase, a leading competitor to FTX. Brian Armstrong, CEO of Coinbase, and Paul Grewal, the Chief Legal Officer, shared their insights on the impending court proceedings through a series of Twitter exchanges on October 3, 2023.

Grewal, having an extensive background in federal court with over 35 jury selections to his name, expounded on his expectations regarding the jury selection process. He highlighted the seriousness with which federal judges approach jury selection, ensuring a fair trial by a jury of peers, and the emphasis on not wasting prospective jurors’ time. Moreover, he pointed out the active role federal judges play in the questioning process during jury selection, a stance differing significantly from many state courts. According to Grewal, while lawyers are naturally inclined to favor a jury beneficial to their case, federal judges strive for a balanced and fair jury.

The Twitter thread invited a comparison of civil and criminal trials’ procedural dynamics, sparking a detailed discussion among the crypto community. An account named Degens Oasis chimed in, outlining the distinct strategies and concerns in high-profile cases like that of SBF. The discussion also touched on the perceived preferential treatment towards SBF and the influence of political donations, hinting at a skepticism towards the impartiality of federal judges amidst political entanglements.

FTX Under Legal Spotlight

The trial comes at a time when FTX has been facing legal scrutiny, marking a noteworthy chapter in the crypto exchange’s journey. The judicial tussle is not only a focal point for legal analysts but also for competitors and the broader crypto community, keen on understanding the ramifications of the case on the crypto industry’s regulatory landscape.

The discourse surrounding the trial and the involvement of industry leaders like Armstrong and Grewal underscores the trial’s broader implications on the crypto sector. It brings to light the evolving legal frameworks and the pressing need for clear regulatory guidelines to foster a conducive environment for crypto enterprises.

Image source: Shutterstock


Tagged : / / / / / / / / /

Legal Team Requests Temporary Release of Samuel Bankman-Fried for Upcoming Trial

Key Takeaways

Samuel Bankman-Fried’s legal team has submitted a letter to Judge Lewis A. Kaplan, requesting temporary release for their client.

The request is based on the need for adequate preparation for the upcoming trial, citing the case’s complexity.

The letter outlines proposed conditions for Bankman-Fried’s temporary release, including restricted access to electronic devices and a gag order.


In a letter dated September 25, 2023, attorneys Mark S. Cohen and Christian R. Everdell of COHEN & GRESSER LLP have submitted a request to Judge Lewis A. Kaplan of the United States District Court, Southern District of New York, for the temporary release of their client, Samuel Bankman-Fried (SBF). The request is made under 18 U.S.C. § 3142(i), stating that the release is “necessary for preparation of [his] defense.”

The Complexity of the Case

The letter emphasizes the complexity of the case, stating that it is “highly technical” and requires Bankman-Fried’s input for adequate preparation. The defense argues that third-party experts cannot replicate Bankman-Fried’s unique knowledge and insight into the facts of the case.

Previous Court Rulings

The letter also references a ruling on September 12, 2023, where the court did not rule out the possibility of a future application for temporary release. Additionally, it mentions that the Second Circuit affirmed the Court’s decision to revoke Bankman-Fried’s bail on September 19, 2023.

Proposed Conditions for Release

The legal team has proposed specific conditions for Bankman-Fried’s temporary release, which include:

Being in the company of his attorneys or a security guard when not in court.

A gag order restricting his communication to only his legal team and immediate family.

No access to electronic devices during the temporary release.

Concerns Over Medication

The letter also notes that Bankman-Fried is currently receiving only half of his prescribed dose of Adderall, despite a court order, and does not have access to his preferred allergy medication, Zyrtec.

Image source: Shutterstock


Tagged : / / / / /

FTX Founder Sam Bankman-Fried Pleads for a Weekday Release Ahead of October Fraud Tria

The cryptocurrency world is abuzz with the latest developments surrounding FTX’s founder, Sam Bankman-Fried, commonly referred to as SBF. In a move that has captured the industry’s attention, SBF has made a formal plea for weekday release from his current confinement at the Metropolitan Detention Center in Brooklyn, New York. This request follows closely on the heels of a federal judge’s decision to revoke his substantial $250 million bail, a decision rooted in allegations of witness tampering.

The primary rationale behind SBF’s request hinges on the overwhelming volume of case-related documents. The defense team has been inundated with a massive trove of evidence, notably including three-quarters of a million pages of Slack communications. Given the constraints of his confinement, SBF argues that a thorough review of these documents is virtually impossible. With the clock ticking down to his fraud trial in October, the pressure to process this information is palpable.

The charges levied against the FTX founder are nothing short of grave. He is embroiled in allegations of orchestrating a sophisticated fraud scheme, purportedly allowing him unauthorized access to a staggering sum—billions of dollars from FTX customer accounts—for personal enrichment. Yet, in the face of these daunting accusations, SBF remains steadfast in proclaiming his innocence.

On the prosecution’s side, they’ve adopted a resolute stance. Their argument is clear-cut: if SBF intends to base his defense on the premise of legal advice he previously received, he must be transparent about the specifics of this advice and its origins. While they’ve extended an offer to furnish SBF with the requisite documents on hard drives, they’ve also highlighted the logistical challenges, noting the impossibility of storing all the information on a single laptop.

Further complicating matters, there were whispers of potentially relocating SBF to an upstate detention facility, one equipped with internet services. However, these murmurs were swiftly quashed by prison officials, leaving the defense’s request hanging in the balance.

As the global crypto community awaits further developments, this case underscores the intricate legal landscape of cryptocurrency regulations. The outcome of SBF’s trial, given the high-profile nature of the accused and the weight of the evidence, including Caroline Ellison‘s diaries, promises to have far-reaching implications for the industry.

Image source: Shutterstock


Tagged : / / / /

Caroline Ellison’s Diaries: Crucial Evidence in FTX’s SBF Trial

Sam Bankman-Fried, known as SBF on Twitter and co-founder of the FTX cryptocurrency platform, is facing intense legal scrutiny. U.S. legal authorities have gathered a plethora of evidentiary documents against him. Among the most notable are the personal annotations and diaries of Caroline Ellison, the former CEO of Alameda Research.

On August 14, 2023, a legal motion was lodged against Samuel Bankman-Fried.

The U.S. legal team plans to leverage Caroline Ellison’s diaries and personal notes as key evidence in the upcoming criminal proceedings against SBF. These writings provide insights into various discussions between Ellison and SBF, touching upon topics like business apprehensions, capital raising efforts, Alameda’s hedging tactics, and contentious revelations about the hedge fund’s ties with FTX.

One piece of compelling evidence is an audio recording from a comprehensive meeting held on November 9, 2022. In this audio, Ellison seems to suggest that the decision to utilize FTX client funds to mitigate financial deficits in the faltering hedge fund was SBF’s idea. This crucial decision was taken shortly before FTX and Alameda declared bankruptcy.

Two other individuals, Gary Wang (FTX’s co-founder) and Nishad Singh (FTX’s past director of engineering), have confessed to fraud-related charges and are now collaborating with the legal authorities.

The defense team representing Bankman-Fried has voiced concerns about the evidence’s timely delivery. They believe that the delay in providing essential data, like the information on Wang’s computer and Ellison’s secure Telegram conversations, has affected their trial readiness.

The legal authorities have also highlighted other alleged wrongdoings by Bankman-Fried. These accusations encompass presenting false statements to a bank, bribing Chinese officials related to Alameda’s frozen accounts, and manipulating the value of FTX’s proprietary token, FTT.

An intriguing facet of this case is the past romantic involvement between Ellison and Bankman-Fried, which might influence their professional interactions.

The court hearing, scheduled to begin on October 2 in a Manhattan federal courtroom, is anticipated to garner significant attention due to its implications for the crypto sector. The impact of Ellison’s writings and audio recordings on the case’s outcome will be closely observed.

Image source: Shutterstock


Tagged : / / / /

SBF Submits Fresh Bahamas Supreme Court Bail Application

The local media in the Bahamas reported that Sam Bankman-Fried has submitted a new request for release on bail. This comes just two days after a court dismissed Sam Bankman-request Fried’s for bail on the grounds that the FTX founder constituted a flight risk. The court’s explanation for its decision was that Bankman-Fried posed a potential flight risk.


According to what has been reported, Sam Bankman-Fried, who is currently doing time in prison for his role in the failure of the cryptocurrency exchange FTX, has made a second appeal to the Supreme Court of the Bahamas in an effort to be released from custody. This follows an earlier attempt to get out of jail on bond, which was denied.


On December 15, a little more than one month after the initial report was made, local media stated that the application had been submitted by the author and that it will be assessed by the court on January 17, which is a little more than one month after the report had been made initially.


Prior to this, on the 13th of December, Bankman attorneys Fried’s asked for him to be released on bond in the amount of $250,000 due to the fact that he did not have any prior convictions and was suffering from melancholy as well as sleeplessness. They argued that he should be released because he did not have any prior convictions and because he was unable to sleep. On top of that, he did not have any prior convictions to his name.


The request for bail was turned down by the judge who was presiding over the case because the judge considered there was a risk that the crypto executive would depart the jurisdiction.


The fact that the government of the Bahamas has declared that it will promptly carry out any request lends credence to the notion that extradition to the United States is a plausible option under the circumstances presented here.


In the United States, the individual who designed FTX is being investigated for eight distinct felonies at the moment. Some of these charges involve money laundering, while others involve wire fraud and securities fraud.


The number of allegations could land Bankman-Fried in prison for 115 years, but legal analysts have told Cointelegraph that there is a lot to play out and that the case could take years to come to a conclusion due to the complexity of the allegations. In other words, the number of claims could land Bankman-Fried in jail for 115 years.


Tagged : / / /

Due to conflicts of interest, SBF’s attorneys drop FTX

The law firm Paul Weiss, which had been providing support to FTX CEO Sam Bankman-Fried (SBF) throughout the proceedings of the company’s bankruptcy, has renounced its representation of the business owner, citing a conflict of interest as the reason for its decision. SBF had been providing support to FTX CEO Sam Bankman-Fried (SBF) throughout the proceedings of the company’s bankruptcy. Throughout the processes of the company’s bankruptcy, SBF has been giving assistance to FTX CEO Sam Bankman-Fried (SBF). SBF has been of assistance to the company throughout the whole of the process of the company filing for bankruptcy.

The legal firm’s efforts to reorganise were derailed as a direct result of the decision made by the client to terminate representation once it was discovered that SBF had tweeted. As a direct result of this, the law firm’s efforts to reorganise were unsuccessful.

On the other hand, as a result of this move, rumours began spreading that the cryptic tweets had been sent with the intention of distracting bots’ attention away from tweets that were concurrently being deleted from the site. As a consequence of the fact that the action was carried out, this rumour began to circulate.

Martin Flumenbaum, an attorney working for Paul, Weiss, was of the opinion that the “constant and disruptive tweeting” of SBF was having a negative influence on the efforts that were being made to reorganise, and he was of the opinion that this was having a negative influence on the efforts that were being made to reorganise. Additionally, he was of the opinion that this was having a negative influence on the efforts that were being made to reorganise. Martin Flumenbaum was of the view that this was having a detrimental affect on the efforts that were being made, despite the fact that there was no evidence uncovered to suggest that malevolent intent was there.

Recently, another con artist by the name of Elizabeth Homes was found guilty of criminal fraud and sentenced to time served as a direct consequence of her activities. It is only a coincidence, but Homes was handed her sentence about the same time as the law company chose to stop supporting SBF. This suggests that the two events are likely unrelated. There is a possibility that the two occurrences are associated with one another, but there is also a chance that they are not.


Tagged : / /

FTX’s Fall Might Hurt CEO’s Crypto Regulation Lobby

The mid-term election in the US is playing a role in influencing and reshaping the regulatory landscape of the crypto industry amid the turmoil brought about by the collapse of the crypto exchange FTX.


With a clearer outcome for the result of the midterm election in the U.S., some analysts predict Republicans could reseize the control of Congress. The shift of balance of power and dynamic discourse in power might affect the ongoing regulation of cryptocurrency and virtual assets. 

Throughout the election campaign, many leaders and enterprises in the crypto industry try to expand their influence and abilities to lobby legislators by offering political donations to their candidates in favour.

Per Reuters, citing data from OpenSecrects, the report disclosed that FTX’s CEO Sam Bankman-Fried, also known as SBF, is heavily involved in this mid-term election and has donated far more than others in the crypto industry.

Data shows that Bankman-Fried’s total contribution of approximately $40 million makes him the sixth-largest individual donor in the United States. The vast majority of his donations go to Democrats, while less than 0.6% of the funding is in support of Republicans, according to OpenSecrets.

Meanwhile, SBF’s deputy- Ryan Salame, Co-CEO of FTX Digital Markets, provided over $23.6 million to Republicans, including over $11,000 supporting Rep. Alex Monnet of West Virginia. Salame’s total contribution pushed him to the 14th biggest individual donor on the list.

However, SBF’s commitments have been questioned alongside the latest gridlock of the FTX. 

The mid-term result comes amid the oscillation of the markets after the collapse of the SBF’s crypto exchange FTX, as Changpeng Zhao announced Binance would acquire FTX under a non-binding letter of intent. Despite the terms of the deal were not disclosed or neither was a timeline for when the deal might close, the market has experienced a new wave of turmoil and volatility amid the crypto winter.

Crypto Bill Regulation Remains Unclear

Part of analysts suggests a Republican-dominated Congress would likely put pressure on agencies, such as the Securities and Exchange Commission (SEC), which the industry has charged with regulating through enforcement, to ease their aggressive posture against crypto firms.

In June, a bipartisan pair of U.S. senators unveiled a bill that would establish new legal frameworks for cryptocurrency and hand the bulk of their oversight to the Commodity Futures Trading Commission (CFTC).

The so-called “Crypto Bill” debate is still ongoing in Congress. The bill, if approved, might empower the CFTC, which considers a more crypto-friendly regulator than the SEC, to oversee the crypto market.

Among controversial issues in regulating crypto, one of the struggles would be the definition of “security”, which financial products count as security or commodities. Who has the authority, and how to regulate it? All these questions remain unclear. 

Previously, CFTC Chair suggested that it should let Congress regulate crypto, which is much better than the gridlock remaining between CFTC and SEC.

Meanwhile, serval legal battles between SEC and virtual assets companies, such as Ripple, are still struggling to seek an end game. In December 2020, the SEC sued Ripple Labs, alleging that the crypto firm had raised over $1.3 billion by selling XRP in unregistered securities transactions. But Ripple maintained that XRP sales and trading did not meet the Howey Test, a test created by the Supreme Court to determine whether a transaction qualifies as a security.

Image source: Shutterstock


Tagged : / / / / / / /
Bitcoin (BTC) $ 37,557.06 0.81%
Ethereum (ETH) $ 2,028.24 0.31%
Litecoin (LTC) $ 69.22 0.65%
Bitcoin Cash (BCH) $ 221.95 0.51%