New York, Wednesday, November 06, 2024 – In a surprising twist, a hacker who drained $20 million from a US government-controlled cryptocurrency wallet returned most of the funds last Friday, reports said.
According to Arkham Intelligence, around $19.3 million in Ethereum and stablecoin USDC were returned, leaving a shortfall of approximately $1.2 million. The wallet, managed by the US Department of Justice (DOJ), originally held funds seized in connection with the 2016 Bitfinex hack.
On-chain analyst ZachXBT flagged the initial transfers as “nefarious,” with funds moving through various decentralized finance (DeFi) protocols and instant exchanges. Blockchain sleuths noted unusual patterns, such as the use of instant exchanges, some drawing liquidity from Binance, which enabled rapid asset swaps and raised suspicion of potential theft.
As funds flowed back into the government-controlled wallet, transactions led to a wallet beginning “0x0Ca,” where notable sums, including $6.1 million and $11.6 million in Aave-based stablecoin aUSDC, were received.
Some sources claim this activity closely resembles test transfers governments sometimes use for bulk digital asset movements, a technique previously employed by German authorities for handling seized Bitcoin assets.
Binance has faced scrutiny over “nested exchanges,” which, as noted in a 2021 Binance blog post, are often used by cybercriminals for their lack of security. Although Binance has taken action against illicit activities on nested exchanges, it has yet to comment on this specific incident.
