Data scientists at blockchain infrastructure firm Elementus have published details of recent transactions from crypto exchange CoinBene that they consider to be suspect, beginning with $105 million in crypto swiftly being moved out of the exchange’s hot wallet.
The findings, reportedly based on data sourced using the Elementus Query Engine, were published on March 27. Elementus also provides independently verifiable raw data that readers can download and compare against the Ethereum (ETH) blockchain.
In presenting its findings, Elementus emphatically states that it is not aiming “to refute what CoinBene is claiming.”
It nonetheless presents several key observations based on its findings, arguing that the identified pattern of transfers and sequence of events “is consistent with how exchange hacks commonly play out” — i.e. “large amount of funds withdrawn quickly, period of inactivity, remaining funds secured into the cold wallet.”
Elementus’ findings are organized as a timeline, spanning March 25-26 Eastern Time:
“Monday 25-Mar, 2:58pm: A series of transfers totaling $105m in value begins out of CoinBene's hot wallet into three different addresses. Monday 25-Mar, 6:24pm: CoinBene's hot wallet ceases all activity and remains inactive for 8 hours. Tuesday 26-Mar, 2:44am: CoinBene's hot wallet begins moving funds to the cold wallet.”
The key points Elementus focuses on include the fact that the amount of crypto being transferred is vast, and while such large transfers may indeed occur when exchanges move funds between hot and cold wallets, “that is clearly not what's happening here,” given that:
“After leaving CoinBene, the tokens were quickly moved into Etherdelta, where they were sold for ETH. A large amount of funds were also moved into centralized Exchanges, including Binance, Huobi and Bittrex. The funds continue to move into exchanges as I write this.”
Transfers between multiple intermediary wallets, Elementus further argues, is not typical for exchanges, but is instead characteristic of people who wish to cover their tracks by funneling ill-gotten funds through a series of “sweeping addresses.”
Elementus notes that the $105 million in market value covers positions in 110 different cryptos, the largest position being $70 million worth of Maximine, a token whose price has reportedly soared 754.5 percent since the start of March.
Elementus also notes that CoinBene was identified as a prime example in crypto index provider Bitwise Asset Management’s recent analysis of suspected fake trading volumes on crypto exchanges, presented to the United States Securities and Exchange Commission last week.
As previously reported, CoinBene — currently ranked 10th on CoinMarketCap by adjusted daily trade volume — has claimed the maintenance downtime has been a preventive measure, and that it has been working to upgrade the security of the exchange’s wallet.