An on-chain expert is characterizing the movement of more than $20 million worth of Ethereum and stablecoins from a wallet that contained money that the U.S. government had confiscated on Thursday as a likely theft. The transfer moved assets connected to the 2016 breach of the cryptocurrency exchange Bitfinex to a five-day-old address.
A portion of those money have since been transferred to so-called quick exchanges, such as one that gets its liquidity from Binance, an offshore exchange that is the biggest cryptocurrency trading platform globally in terms of volume.
Arkham Intelligence, a blockchain analytics company, tweeted about withdrawals from the lending protocol Aave only minutes before the transfers occurred. According to the corporation, it was the first time in eight months that the cash had been touched.
Arkham’s platform reports that $5.5 million in USDC and $1.25 million in the stablecoin Tether were taken out of Aave. These money were then transferred to a wallet that starts with “0x348,” along with $13.7 million in aUSDC—an interest-bearing currency that symbolizes USDC put in an Aave lending market—and $446,000 worth of Ethereum.
Two years ago, millions of dollars of aUSDC were transferred to the government-controlled wallet. It also got a sizable amount of the Tether comparable Aave-based token on the same day.
According to ZachXBT, a pseudonymous blockchain expert, the conduct seemed “nefarious” on Twitter. The detective went on to say that “theft” was probably the reason the money was flowing.
A married couple from New York City hacked Bitfinex in 2016 and subsequently admitted to conspiring to launder money. According to a Department of Justice (DOJ) press statement dated August 2023, officials confiscated digital assets valued at $3.6 billion from Ilya Lichtenstein and Heather Morgan, who took advantage of a security vulnerability at the exchange.
A request for comment from Decrypt was not immediately answered by the DOJ when asked if the transactions were related to law enforcement operations.
They first used 1inch, an exchange aggregator, to trade stablecoins for Ethereum after receiving millions of dollars in government-linked cash. ZachXBT identified this as suspicious activity as it started transferring Ethereum in $40,000 chunks to a deposit address for the cryptocurrency exchange Binance.
As of this writing, a total of $320,000 worth of Ethereum had been transferred to an exchange. Ethereum worth $80,000 had broken off into other wallets at the same moment. ZachXBT said in a remark that the top cryptocurrency exchange wasn’t always the recipient of the payments to Binance. Instead, they seemed to have been sent to a “nested exchange,” which is a liquidity source that uses Binance.
Less than a week has passed since the wallet’s initial transaction with “0x348.” Additionally, CoinSpot, an Australian cryptocurrency exchange that does not conduct business in any other country, provided the wallet that financed it with its first funding two years prior.
As of this writing, the government-controlled wallet was virtually empty. All of its assets were gone, aside from $127 worth of a Donald Trump-themed meme coin.
