US Govt Linked Crypto Wallet Hacked, $20M Worth Stablecoins, ETH Drained

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Sujha Sundararajan

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Sujha Sundararajan

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October 25, 2024 01:23 EDT

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A crypto wallet address linked to the US government, which held Bitfinex seized funds, was reportedly hacked on Thursday for $20 million.

Per blockchain intelligence firm Arkham, hackers drained $20 million worth of Tether (USDT), USD Coin (USDC), aUSDC and Ethereum (ETH).

The hacker converted the stablecoins into ETH and deposited them into multiple addresses labelled “Binance Deposit.” Arkham believes that the hacker has already begun laundering the proceeds via suspicious addresses associated with money laundering services.

Besides, Arkham highlighted that minutes before the transfers, US government pulled $5.4 million out of Aave. “This is their first activity on this address in 8 months.”

Additionally, the government pulled another $1.12 million Tether (USDT) out of Aave.

Further, the pseudonymous blockchain sleuth ZachXBT replied to Arkham that the hack appeared “nefarious.” The sleuth further noted that the funds flow is a result of “theft.”

Bitfinex Seized Funds Hacked

In 2016, a hacker duo stole 120,000 Bitcoin (BTC), currently worth approximately $8.2 billion. The masterminds behind the hack – Ilya Lichtenstein and his wife Heather Morgan – face sentencing this November.

US law enforcement officials seized the stolen crypto assets, which the United States Department of Justice considered the largest crypto seizure at the time.

Further, investigators flagged that the hacker wallet that received millions of dollars from government-linked funds apparently used 1inch, an exchange aggregator, to swap stablecoins for Ethereum.

ZachXBT flagged that perpetrators then shuffled Ethereum in $40,000 chunks to a deposit address for the crypto exchange Binance. However, in another comment, the sleuth clarified that it was not Binance, but “a nested exchange which uses Binance for liquidity.”