Criminals allegedly stole $20 million from US government crypto wallets

Experts in on-chain analysis warned the public about strange on-chain transactions, raising concerns that US government crypto wallets may have been compromised.

Arkham claims that anonymous hackers may have stolen $20 million worth of seized cryptocurrency, including USDT, USD coin, and Ethereum, from crypto wallets owned by the U.S. government
After breaking into U.S. government wallets, the hackers started selling and laundering the money, according to transactions, Arkham said in a statement about the suspicious activities on October 24.
“The funds are currently being traded to ETH after being moved to wallet 0x348. We believe the attacker has already begun to launder the profits using suspicious addresses linked to a money laundering firm.
Arkham observed that the FG removed over $6.5 million in cryptocurrencies from the decentralized Aave precinct long before the blockchain analytics service drew attention to the transactions on the US government wallet. Furthermore, as per the data by Etherscan, one entity/ US government wallet managed to transfer as much as $100,000 worth of cryptocurrency but had to settle up to $1000 in Ethereum fees for the transaction.

ZachXBT, an on-chain detective on Telegram, has confirmed the emerging story, which may even involve money seized from the Bitfinex hackers. According to Arkham, at least one wallet listed in the Bitfinex court case documents contained seized assets sent to wallet 0xc9E”.

The blockchain intelligence firm TRM reports that in the first half of this year, the amount of cryptocurrency stolen through hacks and network exploits more than doubled to US$1.38 billion. Seventy percent of all crypto stolen was the result of five major attacks. Most of last year’s and prior years’ thefts were caused by a few attacks.

But this year’s looted cryptocurrency was lower than the nearly $2 billion stolen in the first half of 2022, the year with the highest number of crypto thefts.

The second half of 2021 saw cryptocurrency prices soar to all-time highs, just like this year. According to TRM, higher prices might likely lead to more instances of cryptocurrency theft. The most common ways that hackers stole cryptocurrency were by illegally obtaining seed codes and private keys, which are the cryptographic strings of numbers that grant access to a cryptocurrency wallet.