Three wallets suspected to be linked to hackers recently converted $38 million in DAI stablecoins into Ethereum within a one-hour window on Wednesday, as reported by Lookonchain and Arkham Intelligence. These wallets executed multiple transactions, trading DAI for Ethereum at an average exchange rate of $4,401 per coin. Data from Lookonchain indicates that the trades were conducted through decentralized exchanges utilizing CoW Protocol and Convex Protocol, which are designed to facilitate large trades quickly while minimizing slippage and associated fees.
Coordinated Swaps by Hackers
According to Arkham Intelligence’s records, the hackers did not liquidate all their DAI holdings in a single transaction; instead, they methodically swapped portions of stablecoins for ETH, with individual exchanges reaching up to $12 million. This strategic approach is believed to be aimed at reducing slippage and keeping their activities under the radar while moving illicit funds.
One of the wallets, identified by the address starting with 0x4Ee3, was responsible for converting over $11 million in DAI to ETH within the designated hour. This wallet sent 2,730 ETH, valued at $12 million, to another address while simultaneously executing smaller trades. Notably, the transactions included significant outflows of 4 million DAI and 5 million DAI, which were exchanged for 906 ETH and 1,133 ETH, respectively. Another trade involved 2.5 million DAI swapped for 567 ETH, with all the accumulated Ether subsequently transferred to a new address, 0xA0168e…B89faCb6, currently valued at $14 million.
Another wallet, starting with 0x1c4, executed several transactions, liquidating 521,000 DAI, along with 4 million DAI and 5 million DAI. This wallet completed its activities with a conversion of 12.12 million DAI into 2,761 ETH. Similar to the first wallet, these funds were then consolidated and routed through CoW Protocol contracts to other addresses.
The largest wallet, beginning with 0x272c, processed over $26.6 million in transactions during the same early morning timeframe. Lookonchain’s data revealed that this wallet swapped 5 million DAI for 1,135 ETH via Convex Protocol, followed by a further conversion of 12.12 million DAI, yielding 2,761 ETH. The cumulative total for this wallet amounted to 2,761 ETH, approximately valued at $12.15 million, which was then sent to the previously mentioned wallet, 0x4Ee3. The synchronization in timing, volume, and transaction routing among these wallets indicates a coordinated effort to fragment the $38 million DAI liquidation to obscure their activities.
Market Implications and Ethereum’s Performance
Blockchain analysts observing these transactions suggest that the activity aligns with tactics commonly employed by individuals attempting to disguise the origins of illicit funds, often by breaking swaps into smaller transactions. Additionally, insights from a user on X indicate that the hackers might be capitalizing on the “Uptober” market rally, which has seen Ethereum’s price increase by 13% from its recent lows, according to CoinGecko.
At the beginning of October, Ethereum was trading at approximately $4,464, close to its recent peak of $4,529. Market experts attribute the price stability to substantial inflows into Ethereum exchange-traded funds (ETFs), with nine US-listed ETH funds reporting inflows totaling 14,864 ETH, equating to $65.6 million during the week. These institutional investments are believed to have played a crucial role in absorbing selling pressure and preventing a downward volatility trend.
Following a dip to $3,900 on September 26, which some traders are labeling as a potential market bottom for 2025, Ethereum has shown signs of a resurgence. Technical patterns referred to as the “Power of 3” suggest the possibility of an 80 to 100 percent price increase by year-end. According to TradingView’s market analysis, Ethereum currently resides in a neutral-to-bullish zone, with support established at $4,200 and resistance at $4,600. The Relative Strength Index (RSI) stands at 43.1, indicating a neutral market state with no immediate signs of being overbought or oversold.
