The FTX Thieves

Mysterious robbers stole hundreds of millions of dollars from FTX just before the company was about to collapse. Blockchain study of cryptocurrency may give a solution.

Cryptocurrency has always provided an interesting mix of temptations and difficulties for those trying to steal it. It is an attractive target since it is digital cash housed in multibillion-dollar quantities on hackable, internet-connected networks. However, once taken, the blockchains on which practically every cryptocurrency is based allow for tracking the money’s every step and, in many cases, identifying the culprits. So, after a massive heist pulled nearly $500 million in funds from the already collapsing FTX cryptocurrency exchange yesterday, the world’s crypto tracers are now closely tracking where that loot ends up—and looking for any clues that reveal the thief was an FTX insider or simply an opportunistic hacker.

FTX’s remaining reserves were drained of more than $663 million in cryptocurrency, much of which appears to have been stolen, hours after the big cryptocurrency exchange filed for bankruptcy in the aftermath of its dramatic, 10-figure collapse. “FTX has been hacked,” an administrator posted on the FTX Telegram channel. “FTX applications are malicious. Remove them.” It’s unclear how FTX was stolen or whether its applications were affected, and the company hasn’t formally reported any theft. However, in a tweet, the company’s US general counsel stated that “unauthorized access to some assets has happened.”

Elliptic, a crypto-tracing and blockchain research service, soon showed that the $663 million outflow appeared to be a mix of FTX’s moving of coins into its own storage wallets and an unknown theft. According to Elliptic, all $477 million of the assets appear to have been taken, however TRM Labs, another cryptocurrency-tracing outfit, estimates the figure at $338 million. Twenty-four hours after the heist, most of the money had been transferred to a handful of cryptocurrency addresses, where the whole crypto-tracing business, a wide community of amateur crypto sleuths, and no doubt law enforcement organizations all over the world are now keeping a close eye.

That observability, for the FTX monies and other stolen crypto stashes, provides a significant obstacle for any crook attempting to pay out their hoard into traditional currency. In this case, where regulators and an army of enraged creditors are looking for any indication that FTX’s employees or owners were the perpetrators, it could eventually help confirm that insiders were responsible for the theft—or show that external hackers took advantage of the chaos at FTX to commit a burglary.

At least $220 million in stolen cash in the form of several cryptocurrencies were immediately converted into the cryptocurrencies ether and dai using decentralized exchanges—trading systems that let users can shift coins without providing identifying information. However, paying out those coins and the remainder of the stolen treasure will almost certainly need exchanging it on a controlled exchange, which nearly usually necessitates users providing identifying information. The criminals may attempt to launder the money by mingling it with coins from other users via a “mixing” service. However, crypto tracing blockchain experts have demonstrated that they can frequently overcome such mixers, especially when consumers pour extremely significant quantities into them.

Meanwhile, many other cryptocurrency enthusiasts have been keeping a close eye on one Ethereum address, which is now holding roughly $192 million in money. The account has been transferring modest amounts of Ethereum-based tokens, some of which appear to be worthless, to a number of exchange accounts, as well as Ethereum founder Vitalik Buterin and Ukrainian cryptocurrency fundraiser accounts. However, crypto experts believe that these transactions are more likely intended to confuse law authorities or other observers before any actual attempt to launder or cash out the money.

The theft of FTX, whether it totals $338 million or $477 million, is hardly an unusual haul in the realm of cryptocurrency crime. Cryptocurrencies tracking led to the arrest earlier this year of a New York couple suspected of laundering $4.5 billion in cryptocurrency.

However, in the instance of the high-profile FTX robbery and the exchange’s general demise, tracing the misdirected cash might help lay to rest—or confirm—swirling suspicions that someone within FTX was responsible for the theft. Sam Bankman-Fried, the company’s Bahamas-based CEO who resigned Friday, lost nearly his entire $16 billion fortune in the collapse. According to an unsubstantiated claim, he and two other FTX officials are “under surveillance” in the Bahamas and are not permitted to leave.

As speculation mounts about whether—or to what extent—own FTX’s management was responsible for the theft, the case has begun to resemble, more than any recent crypto heist, a very old one: the theft of a half billion dollars’ worth of bitcoins from Mt. Gox, the first cryptocurrency exchange, discovered in 2014. In that case, blockchain research performed by cryptocurrency tracing startup Chainalysis, in collaboration with law enforcement, assisted in pinning the theft on external hackers rather than Mt. Gox’s own employees. Eventually, in 2017, a Russian man named Alexander Vinnik was caught in Greece and convicted of laundering the stolen Mt. Gox assets, exonerating Mt. Gox’s troubled leaders.

It is unclear whether history will repeat itself and bitcoin tracking will reveal the innocence of FTX’s workers. But, with more eyes than ever scouring the blockchains of the cryptocurrency economy, it’s a safer bet that the mystery behind the FTX heist will be solved sooner or later.

How to generate income in metaverse

In general, the technologies that firms allude to when they talk about “the metaverse” might include virtual reality (defined by persistent virtual environments that exist even when you’re not playing) and augmented reality (which blends features of the digital and physical worlds). It does not, however, necessitate that those areas be accessed solely through VR or AR. Virtual worlds, such as Fortnite elements accessible via PCs, gaming consoles, and even phones, have begun to refer to itself as “the metaverse.”

Many organizations that have jumped on the metaverse bandwagon foresee a new digital economy in which users may produce, purchase, and sell items. In more utopian metaverse ideas, it’s interoperable, enabling you to move virtual objects like clothing or vehicles from one platform to another, however this is more difficult than it seems. While some supporters argue that emerging technologies such as NFTs can enable movable digital assets, this is simply not true. Moving goods from one video game or virtual world to another is an incredibly difficult operation that no one firm can handle.

To engage with youthful consumers, brands are venturing into virtual spaces. But are these digital places simply billboards for corporations, or can they provide real-world benefits?

Whatever it is, retailers are going in headfirst — and plenty of customers are watching.

Companies all over the sector are increasingly staging activations on platforms that are considered to be part of the metaverse. The definition of what the metaverse is (or is supposed to be) varies, but in general, it is a virtually immersive version of the internet. Retailers are studying Roblox, Decentraland, and Sandbox as ways to get into the metaverse, even if they aren’t as interoperable as some would want.

According to its most recent financial report, Roblox has 58.8 million daily active users, a 24% rise from the previous year. The platform is also popular among younger users: According to sources, there were 24.2 million daily active users under the age of 13 in Q2. With that age group expected to acquire purchasing power over the coming decade, it’s no surprise that businesses are attempting to meet them where they are.

Gucci, Walmart, and Gap have all launched Roblox activations ranging from well-designed virtual pop-up storefronts to interactive games. But is the metaverse merely a virtual billboard for corporations, or can it be linked to real-world items and revenue? Here’s a look at how some retailers are utilizing the space to get practical advantages.

‘Consumers continue to place a premium on physical encounters.’

Aside from creating visually appealing activations in the area, businesses have begun to encourage advantages such as real-world clothing collections, discounts, and loyalty bonuses.

Claire’s, an accessories business, debuted ShimmerVille in Roblox last month, with a focus on self-expression through virtual goods that are also available in its physical locations. In June, Victoria’s Secret’s young sub-brand Happy Nation teamed with Roblox to establish a virtual obstacle course where users could donate genuine pairs of underwear from the company to Undies for Everyone while also viewing the newest capsule collection.

Consider how you had to test things in the past. The only true method to evaluate the features and qualities of many products was to manufacture a batch of those products and get them out to market, which was costly. However, the ability to launch it from a digital standpoint allows you to accomplish things that scale much more cheaply.

What about a quick return on investment?

Experts are divided on whether these virtual worlds will generate actual money for businesses in the near future. Certainly, money is being invested in sites such as Roblox. The virtual world reported $517.7 million in sales in its most recent financial report, a 2% increase year over year. According to a McKinsey projection from June, the metaverse might have a $5 trillion influence by 2030. According to the paper, the metaverse would have a market impact of $2 trillion to $2.6 trillion on e-commerce. In addition, Citi projected in March that the addressable market for the metaverse may be worth between $8 trillion and $13 trillion by 2030.

Can brands, however, get more rapid benefits on their investments?

At the moment, experts see it as an area to learn and experiment, where businesses may focus on capturing the attention of new audiences. Only in exceptional instances can the brand realize a monetizable return on investment.

Not all Roblox brands choose to offer their own virtual items. When looking for other companies that have participated in the sector, such as Nike or Gap, the top results are goods produced and sold by individual producers rather than the brands themselves. Whether or whether money can be made from the metaverse now or in the future, many people feel that the concept itself has staying power, regardless of how it turns out.

Even if the hype cycle in the metaverse appears to have finished, firms are probably as involved and dedicated today as they have been in the past six months, and this is likely to continue. The fact is that these technologies will drastically alter our lives. This is not going away. Some individuals believed that the internet was merely a hype cycle. And the metaverse will have a similar influence.