Hacker Steals $20 Million in Crypto From US Government, Returns Most of It

Because crypto assets are so valuable, consumers all over the world are clamouring to get their hands on them. Just consider the huge amounts raised for different crypto presales and how much is spent on new tokens. As Michael Graw has explained, new cryptocurrency is highly sought after, whether by investors looking to buy or mint. 

At the same time, nefarious characters would rather resort to stealing cryptocurrency than buying. We’ve seen countless hacks and thefts over the years but now, it seems the thieves are becoming more ambitious. 

How the Government Was Robbed

The latest saga began on October 24, 2024, when a crypto wallet belonging to the US government was drained of $20 million. The tokens, which were mostly stablecoins and Ethereum, were recovered from the 2016 hack of the crypto exchange Bitfinex. Once the funds were stolen, they were moved to a five-day-old crypto wallet and then to instant exchanges in a bid to cover the thieves’ tracks.

As we’ve said, thefts are not unheard of in the crypto world, but stealing previously stolen funds from the US government is perhaps a strange occurrence. What is even stranger is how quickly the issue was resolved and the money returned. 

Hackers Return Funds

On October 25, 2024, barely a day after the funds were first stolen, $19.3 million in crypto was returned to the US government crypto wallet. Not only is this unusual but the way transactions were completed afterwards raised a few eyebrows. Small amounts of Ether, USDC, and even TRUMP tokens were first sent to various addresses before larger amounts were deposited. 

For example, a wallet address beginning with 0x0Ca received a small amount of Ether before getting over $6 million in it. By the end of Friday, the wallet was once again empty, with the tokens being sent to various wallets. But, as crypto experts online have pointed out, this is not unusual. Typically, governmental bodies will send a small amount of crypto to a new address to ‘test’ it before sending bigger amounts.

Crypto transactions, as we know, cannot be reversed and there is some benefit to doing this to avoid losing funds. In light of the theft, it also makes sense to move funds to other wallets since the original one was compromised. Now, we can mostly be sure that the money is safe. 

The Mystery of the Theft

Even though most of the funds were returned and have now been disbursed to other wallets, the mystery remains. Who stole the tokens in the first place? The government has not spoken publicly about it but it seems very obviously like a theft. The fact that the tokens were moved to instant exchanges and not all were returned looks like the actions of a thief. 

But even with that, it does not explain why most of the funds were returned. In the long and complicated history of hacks and thefts in the crypto sector, funds being returned is virtually unheard of. In fact, most victims never get their money back. So what would compel this set of hackers to return the funds (if indeed they were stolen)?

Also, the incident speaks to the security issues that crypto users face. It is one thing for individual investors to have their wallets hacked and drained but the US government facing the same issue is discouraging, to say the least. While we may never truly know the story behind this particular hack, it will, sadly, not be the last one we will hear of.