Famous 'FTX drainer' swaps 20,000 ETH to BTC as Bitcoin price slides to $16,000

Cryptocurrencies are struggling on Monday amid the ongoing debacle ignited by the collapse of FTX, a crypto empire built by Sam Bankman-Fried (SBF). Bitcoin price trades 3% down on the day at $16,067, while Ethereum dodders at $1,123. Due to this early week sell-off, the total crypto market capitalization fell by 3.4% to $829 billion.

FTX drainer sparks another crypto sell-off

The crypto market's underperformance in Monday's sessions can be attributed to speculation regarding the $600 million drained from FTX a couple of weeks ago. About $72 million in Bitcoin and Ethereum has been moved through the Ren BTC gateway by an individual or entity referred to as the "FTX drainer."

An article by The Block said that the primary wallet used by the FTX drainer had consolidated approximately 250,000 ETH from other small wallets by Saturday. However, the mysterious hacker started moving the funds on Sunday by swapping ETH for BTC.

The process involves sending the funds to a new wallet before swapping the Ethereum to renBTC. This is a tokenized version of BTC created by Ren, a protocol that enables the movement of value between blockchains. Following the swap, renBTC is then bridged to the main Bitcoin blockchain via the gateway service offered by Ren.

The FTX drainer swapped 20,000 ETC worth slightly over $22 million in addition to the 50,000 ETH ($56 million) converted on Sunday. According to communication done by PeckShieldAlert via Twitter, this individual or entity has, in total, bridged 4,540 renBTC, worth around $72.9 million.

#PeckShieldAlert FTX Accounts Drainer 1 currently holds 200,735.1 $ETH (~$235.5M) & drops to the 37th largest holder of $ETH (from 27th)
FTX Accounts Drainer 1 has transffered 50k $ETH (~$58.5M) to 0x866E, then 0x866E swapped these $ETH for ~3,517 $renBTC and bridged out pic.twitter.com/Qokr8bQrvg

— PeckShieldAlert (@PeckShieldAlert) November 20, 2022

FTX CEO billing the defunct exchange $1,300 an hour

The new CEO of the collapsed FTX exchange, John Ray, is reportedly billing $1,300 per hour for the time spent cleaning up the mess SBF left behind. According to documents filed on Saturday at the United States Bankruptcy Court, experts in charge of restructuring have requested to continue paying wages to the firm's senior staff

FTX's success came undone in early November after an article by CoinDesk made public a worrying connection to the firm's trading arm, Alameda Research. Investors rushed to withdraw their assets from the exchange after Binance announced that it was planning to liquidate $580 million in the exchange's native token, FTT - causing a liquidity crisis.

The last couple of weeks have seen the walls SBF built to hide the sorry state at FTX crumble. The documents filed at the court indicate that the CEO bills $1,300 an hour while Chief Administrative Officer Kathryn Schultea takes home $975 an hour.

Interestingly, non-employee directors charge the bankrupt exchange $50,000 per month. Edgar Mosley, managing director at restructuring consultancy Alvarez & Marsal, defended the fees saying that they are "critical to maintaining and administering" the assets FTX still owns and charting a new path into the future.

Bitcoin price bleeds again

The revelation of FTX drainer activities sent Bitcoin price into a tailspin where it sought support at $16,000. A recovery seems nigh, with the largest cryptocurrency trading at $16,155 at the time of writing.

BTCUSD four-hour chart

If buyers maintain this momentum, Bitcoin could close the day above the 50-day Exponential Moving Average (EMA) (in red) at $16,752. Such an uptick in the price will also set the pace for Bitcoin to break above the major hurdle highlighted by the 100-day EMA (in blue) at $17,448 and probably close the gap to $20,000.