According to a report from Chainalysis, two groups of highly sophisticated cyber criminals have likely stolen $1 billion in cryptocurrency hacks. In a report shared with the Wall Street Journal, the two entities, which Chainalysis call Alpha and Beta, account for the majority of all money lost in these scams. This dismantles the common belief that hacks are undertaken by lone wolves.
Stolen Cryptocurrency Sent By Hacker Groups 5000 Times Before Being Cashed Out
Stolen funds were reportedly transferred an average of 5000 times before being converted to cash through online exchanges. The WSJ cites Philip Gradwell, the chief economist at Chainalysis, as saying that the two organizations are probably still active. However, they do admit that there is a chance their analysis is wrong and that the company has been unable to determine the group’s identity.
Alpha is apparently a “giant, tightly controlled organization, at least partly driven by non-monetary goals” while Beta is a small, less organized “heavily sanctioned organization heavily focussed on the money”.
Alpha begins transferring the crypto from address to address immediately, converting the funds within one month on average. Beta tends to wait for up to 18 months, allowing time for all publicity around the attack to lessen, then cash out 50 percent within days after their self-imposed waiting period.
Those funds sometimes go through regulated exchanges, Gradwell said that after so many transfers, even those exchanges with anti-money laundering structures have difficulty noticing that they have received proceeds from hacking.As much as $16 million worth of Ethereum and ERC20 tokens were stolen in January’s hack of New Zealand exchange, Cryptopia. The exchange has been put into maintenance and they are assisting the New Zealand Police and High Tech Crimes Unit with their enquiries. Other exchanges that fell victim to cryptocurrency thefts last year alone were Tokyo-based Coincheck, which lost approximately $530 million, and South Korea’s Coinrail, where $40 million was stolen.