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Alameda-Linked Funds on the Move Again via Coin Mixers

Wallets linked to Sam Bankman-Fried's Alameda Research are swapping and transferring crypto funds, using coin mixers to obscure transactions.

3 min read
Former Alameda Research CEO Caroline Ellison. Image: @carolinecapital on Twitter

Wallets linked to Alameda Research, FTX founder Sam Bankman-Fried’s collapsed trading firm, continue to shuffle around crypto funds and are using coin mixers to obscure transactions, blockchain analysts said Thursday. 

On Wednesday, the wallets were spotted swapping obscure tokens for Bitcoin and Ethereum—the two largest cryptocurrencies by respective market cap—along with stablecoin Tether. More than $1.7 million worth of crypto was traded, according to Arkham Intelligence data. 

Furthermore, some of the funds are being put through coin mixers—apps which anonymize crypto transactions and hide their origins. And that effort to obscure the movement of coins is now continuing today.

Pseudonymous blockchain sleuth ZachXBT said that the Bitcoin was put into Wasabi, a popular wallet that groups Bitcoin transactions together to conceal their origins. It isn’t currently clear who is behind the transactions, but ZachXBT wrote that it is unlikely that a liquidator would use tools like FixedFloat and ChangeNow to rapidly exchange funds.

Alameda Research is a trading firm that was founded by disgraced crypto mogul Sam Bankman-Fried, who is currently under house arrest following his release on bond by United States officials last week. Bankman-Fried had been extradited from the Bahamas, where he spent several days in prison before being transferred to the U.S.

Feds hit the former FTX boss with eight criminal charges this month—including money laundering and wire fraud—after his crypto empire crumbled in November. The U.S. Securities and Exchange Commission (SEC) also filed charges against the FTX co-founder, while the Commodity Futures Trading Commission (CFTC) filed suit against him and his companies.

It is alleged that Bankman-Fried used customer funds to make risky bets through Alameda Research, which ultimately wasn’t sustainable and led to a massive bankruptcy—and a lot of investors’ money to go up in smoke. Former Alameda CEO Caroline Ellison reportedly told a judge that she aided in Bankman-Fried's schemes despite knowing that it was both wrong and illegal to do so.

There have been many mysterious movements of FTX-linked crypto funds since the exchange collapsed in November. On the night that the company filed for bankruptcy, hundreds of millions of dollars in digital assets flowed out of the exchange.

It still isn’t clear who took the funds, but James Bromley—counsel to FTX’s new management—said that a “substantial amount” of the exchange’s assets are missing or have been stolen. The U.S. Department of Justice is reportedly investigating what happened to those funds, per a Bloomberg report this week.

Coin mixers are popular with those who want increased privacy while handling digital assets, but they have also attracted negative attention for alleged ties to illicit activity. The U.S. Treasury Department blacklisted Ethereum coin mixer Tornado Cash in August, claiming that criminals were using the autonomous, decentralized service to launder money. 

According to the Treasury Department, North Korean state-sponsored hacking group Lazarus Group was among those that used Tornado Cash to launder stolen funds. 

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