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Sam-Bankman Fried Violated Release Conditions?

Well, it looks like trouble might be brewing for Sam Bankman-Fried (aka SBF), the founder of now-defunct crypto exchange FTX. On-chain data suggests that SBF has been cashing out large amounts of cryptocurrency soon after being released on bail.

According to an on-chain investigation by DeFi educator BowTiedIguana, SBF has cashed out $684,000 in crypto to an exchange in Seychelles while being under house arrest. Yikes! This could potentially mean that SBF has violated his release conditions, which state that he can't spend more than $1,000 without permission from the court.

BowTiedIguana shared a series of obfuscated wallet transactions that are allegedly linked to SBF, and it looks like all the funds were sent to a centralized crypto exchange in Seychelles and to the crypto bridge RenBridge. SBF has denied any involvement in the movement of funds from Alameda wallets, tweeting that "None of these are me. I’m not and couldn’t be moving any of those funds; I don’t have access to them anymore."

It's unclear what's going on here, but it looks like the crypto community is getting more and more suspicious by the day.


Core Bitcoin Developer Hacked for Over $3 Million

On New Year's Day, Luke Dashjr, a longtime Bitcoin developer, had "basically all" of his Bitcoin holdings stolen by an unknown hacker. The amount of Bitcoin taken is unknown, but Dashjr tracked "some of it" to a wallet that received approximately 217 Bitcoin, or around $3.6 million. Dashjr believes that his cold wallets were compromised through a compromised PGP (Pretty Good Privacy) key and that the attacker's IP came from a ColoCrossing server. In a Reddit discussion, he stated that he had last accessed his cold wallets in September. Dashjr has called out ColoCrossing for allegedly "dropping the ball on abuse investigation last time" and has vowed to switch to a new server provider. There were also suggestions that a security breach he tweeted about in November may be connected to the hack. Dashjr has warned that "everything is compromised," including potentially his Twitter account, and has cautioned against using Bitcoin Knots, a Bitcoin wallet signed by his compromised PGP key. He has also reached out to the FBI for help.

Binance CEO Changpeng "CZ" Zhao offered his support, stating that he had informed the exchange's security team of the theft and that any crypto linked to the hack would be frozen if it was sent to Binance. Zhao also used the incident to showcase the risks of self-custodied crypto, including hot wallets, cold wallets, and DeFi exchanges. Self-custody solutions have gained popularity during the ongoing "Crypto Winter" and insolvency crisis as people look to move their balances away from centralized entities like exchanges and lenders. However, after billions of dollars worth of crypto were withdrawn from Binance in a single day, Zhao warned in a Twitter Spaces talk that "99% of people" will lose crypto that they hold using self-custody solutions. If one of the most prominent Bitcoin developers can lose his funds in self-custody solutions, so can you. Take the time to protect your private keys, and stay safe in 2023.

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