Crypto mixers, also known as tumblers, are tools that obscure the transaction path and make it difficult to trace the funds back to their source. The sudden movement of funds from Alameda wallets just days after the firm's CEO, Sam Bankman-Fried, was released on bail raised suspicions within the crypto community.
According to data from the crypto forensic group Arkham, the fund transfers began with multiple Alameda addresses swapping tokens for Ether/Tether and sending them to crypto mixers. Most of these transfers were traced to two leading wallets starting with 0xe5D and 0x971. The tokens were sent to an address starting with 0x738 and then to 0x64e. This 0x64e wallet then divided the ETH and sent it to smaller wallets, generally around $200,000 and $50,000. The funds were then sent to services such as Fixedfloat and ChangeNOW.
In a statement on its company blog, ChangeNOW stated that it works closely with investigators to detect the flow of illegal funds and prevent similar incidents. Another wallet was used to swap stablecoins, where the assets were first swapped into USDT and then sent to Fixedfloat. A total of 800,000 Tether was swapped out using mixers, while another 400,000 Tether was funneled through other methods. An additional 200,000 Tether worth of stablecoins were sent to the Bitcoin network using renBTC.
Overall, $1.7 million worth of funds were swapped and sent through various mixing services, including 270.5 ETH through ChangeNOW, 800,000 USDT through Fixedfloat, and 200,000 USDT through Curve SynthSwap to native Bitcoin. The use of crypto mixers and the extensive planning to conceal transaction routes have led many to speculate about the identity of the individuals behind the fund transfers and the motives for their actions.
Preventing Fraudulent Activity in the Crypto Industry
The movement of funds from the Alameda wallet through mixing tools has generated significant attention within the crypto community. Many have questioned the timing of the transfers, while others have pointed to the use of mixing services and the inability of authorities to prevent such activity. In its statement, ChangeNOW emphasized its commitment to preventing fraudulent actions and working closely with investigators to detect illegal funds.
This case highlights the ongoing challenges the crypto industry faces in preventing and detecting fraudulent activity. As the use of crypto assets becomes more widespread, exchanges and other industry players need to implement strong compliance measures and work closely with law enforcement to identify and prosecute individuals engaged in illegal activities.
