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Majority of Money Stolen in Cryptocurrency Hacks Ended with Two Groups: Chainalysis Report

January 29, 2019 12:27

Chainalysis, a cryptocurrency analytics firm, has found through its analysis that majority of cryptocurrency hacks might’ve been organized by two hacking groups. It has also said, however, that its analysis may also be incorrect.

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If we think of cryptocurrencies and hacking at the same time, it’s not too difficult to recite several examples. In last year alone there have been dozens of cases in which crypto wallets or exchanges were hacked. The combined amount of money stolen in those hacks runs into hundreds of million-dollars. But what if we tell you that all those hacks have been organized by two groups of hackers?

This may seem like an outlandish conspiracy theory, but analysis done by reputed crypto analytics firm Chainalysis seems to suggest the same. The company shared its analysis with Wall Street Journal, and it was covered by the premier newspaper of United States in a an online story yesterday. According to the story the Chainalaysis report states that almost all funds stolen in cryptocurrency hacks and scams have ended up with two entities. Chainalysis calls those entities Alpha and Beta in its report, and both entities seem to have major differences in their operations. Moreover, both groups are perhaps still active.


According to the report, while Alpha is a giant organization with tight control driven partly by non-monetary goals, Beta is a smaller and less-organized entity with heavily sanctioned structure and strong focus on monetary goals. Both these organizations transferred the stolen funds roughly 5,000 times before cashing them out into fiat currencies. Many times funds were also routed through popular cryptocurrency exchanges, and they moved undetected by the systems of those exchanges because despite strong AML compliance the systems can’t detect a money trail as long as 5,000 transactions.

Both these groups also have major differences in their ways of cashing out. While Alpha starts moving funds as soon as they reach it, Beta waits for up to 18 months to allow the publicity around hack to cool down. Even after the completion of this self-imposed waiting period Beta cashes out only 50% of stolen funds, while Alpha cashes out as much as 75% of funds within a month of stealing them.

Chainalysis, however, has also accepted in its report that its analysis may also be inaccurate because the company has still not been able to determine the identity of these groups. Nevertheless, it’s an interesting analysis that can attract the eyeballs of many investigative agencies. Let’s see how they respond to it!

Technology and business were my core interests, so it wasn't surprising that I got interested in cryptocurrencies, which operate at the intersection of both these things. Now I live my passion by trading cryptocurrencies and covering Cryptocurrency news. You can connect with me on Facebook to learn more about me. :)


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