On 28 January 2019, Wall Street Journal (WSJ) reported that two hacker groups were responsible for majority of the crypto hacks that had occurred, stealing cryptocurrencies worth $1 billion. The result was revealed by a report published by Chainalysis, a blockchain analytics company.
Take note that Chainalysis stated that its analysis may be incorrect and the identity of the two groups have not been able to be determined by the firm. The two hacker groups were given temporary codenames ‘Alpha’ and ‘Beta’.
$1.7 billion worth of cryptocurrencies have allegedly been stolen through crypto hacks since Bitcoin (BTC) was created, and a major portion of $1 billion was allegedly stolen by the two groups.
The report stated that Alpha is a giant organization, tightly controlled and was not hacking just for the sake of financial benefits. The group reportedly transferred the cryptocurrencies stolen immediately through multiple wallet addresses. The group reportedly cash out 75% of the digital assets within a month on average.
On the other hand, Beta is a “heavily sanctioned” organization, smaller and less organized, which goal was to reap the maximum amount of money it can get. Different from Alpha, Beta would normally wait up to 18 months before transferring the stolen funds. After the 18-month period, the group cash out relatively quickly compared to Alpha, converting 50% of the cryptocurrencies in a matter of days.
The similarities between the two entities are that they both transfer funds many times through different addresses before converting them to fiat currencies, with an average of about 5,000 times as reported by the analysis. Moreover, both groups would sometimes utilise regulated crypto exchanges as well to convert the stolen funds. Philip Gradwell, chief economist at Chainalysis, explained that it was difficult for exchanges even with Anti-Money Laundering structures to detect the false origins of the funds given the number of transfers the funds have gone through.
Additionally, Gradwell stated that the two major hacking groups is probably still active, threatening the security of the crypto market.