How Bitcoin Thieves Laundered Funds Post-Binance Hack: A Deep Dive

Binance Hack: The Great Bitcoin Heist

Back in May 2019, the Binance exchange faced one of the biggest security breaches in cryptocurrency history, as it lost a staggering 7,000 Bitcoin (BTC), valued at over $80 million during that time. While most people were left scratching their heads and questioning the security of such platforms, the thieves had other plans—namely, laundering their ill-gotten gains.

The Laundering Begins

According to a study by Luxembourg-based crypto analysis firm Clain, the hackers began laundering their loot about a month after the breach. On June 12, 2019, it was reported that they started utilizing Chipmixer, a crypto mixing service notorious for making it nearly impossible to trace transactions. Clain’s team discovered that tracing the funds was simpler than expected, due to the nature of Bitcoin being less than great at hiding.

The Good, The Bad, and The Traceable

As it turns out, washing that much crypto in a short time frame is a bit of a logistical nightmare for hackers. In their meticulous research, Clain managed to identify the initial hacker addresses, helping to expose a lengthy chain of ownership alterations through advanced neural network tools. Who knew neural networks would become the heroes in the battle of good vs. evil!

Chipmixer: The Crypto Tumbler of Choice

Chipmixer was where the magic happened—or, depending on how you look at it, where the dark arts of money laundering took flight. The firm was reported to have experienced its highest inflows ever during this time frame. Clain posited that due to this abnormal activity, any outgoing funds from Chipmixer were more than likely linked back to the Binance heist.

The Amounts Involved: A Stunning Sum

In their findings, Clain estimated that over 5,300 BTC were lurking in various merged fund clusters within Chipmixer. That’s right—talk about cleaning house! Further, they suggested that 183 BTC were confirmed as hacker funds shortly after attempted laundering, while another 814 BTC are currently pending confirmation—talk about your nail-biting cliffhangers!

Why Chipmixer? Understanding the Mixer

For those unfamiliar, a crypto mixing service, or crypto tumbler, is like a blender for Bitcoin. It combines coins from different users and then redistributes them, complicating the trail back to the original source. While the concept might sound like a fun kitchen gadget, these mixers gained notoriety for their association with money laundering. Just consider Europol’s mid-May closure of Bestmixer.io, one of the largest crypto tumblers. It seems that when it comes to shady transactions, the authorities don’t make smoothies!

Aftermath and BA-CEO (Binance Action – CEO Edition)

After the dramatic events of May 7, funds from the hack were dispersed across several addresses. By May 9, Binance’s CEO, Changpeng Zhao, was already addressing rumors about alleged Know-Your-Customer (KYC) data leaks, dismissing them as attempts to spread fear, uncertainty, and doubt (FUD). Nothing like a little PR exercise to keep the waves calm post-storm!