Last week’s massive cryptocurrency crash not only affected traders, but also left millions in stolen funds held by hackers who, caught in a panic, mismanaged the market at a disastrous time.
Blockchain sleuth Lookonchain has tracked down at least six wallets linked to known hackers who lost more than $13.4 million after panic selling of ether. during the recession.
The hackers in question appear to be part of a group of cybercriminals who have recently been involved in cryptocurrency theft. The mention that “six hacker wallets” lost more than $13.4 million suggests a coordinated effort, possibly linked to a well-known hacker syndicate.
Buy high, sell low
The selloff began when a wallet dumped 7,816 ETH at $3,728 per coin, a move that coincided with the steepest part of the drop. As prices fell further, five more wallets followed suit, contributing to the overall market decline.
However, instead of keeping the sold assets in stablecoins or attempting to launder the ETH, the hackers bought back the same amount (7,816 ETH) at $4,159 as the markets recovered, ensuring another round of losses.
On October 18, blockchain analysis revealed that the total loss from these trading errors reached $13.4 million.
Given the scale of the funds (around $29 million in the latest transaction alone), these hackers are likely sophisticated actors with access to advanced tools to exploit vulnerabilities in decentralized finance (DeFi) protocols, exchanges, or smart contracts.
Panic selling
The hackers’ trading patterns during volatile market conditions suggest that while they are experienced in exploiting players in the ecosystem, they react to market swings like any other over-leveraged trader would: with poor timing and emotional decision-making.
Lookonchain called the behavior “panic selling,” while some cryptocurrency watchers even joked that the attackers could be “great hackers, terrible traders.”
It wasn’t all his money
However, hackers likely acquired those funds through hacking. So while the losses are real, the funds were probably not obtained but stolen.
Blockchain analysts believe that ETH originated from previous attacks, meaning the hackers were trading assets they had not purchased in the first place.
In that sense, losses may not hurt as they would for ordinary traders.
Think of it this way: someone finds a suitcase of cash, plays it wrong, and leaves empty-handed. They are worse off than before, but not in out-of-pocket expenses, since the money they lost was not theirs in the first place.
Maybe the hacker group should have continued with the hacking and maybe started looking for a criminal portfolio manager. Still, the missteps reveal something about the current state of the crypto landscape. Even the most sophisticated attackers can falter under pressure.
wash trade
There is another possibility out there. While they were “terrible traders,” they may also have been laundering their ill-gotten gains through these trades, strategically dumping tainted funds during the panic to later buy back clean funds, even if they were at losses.
As one poster from
The October 10 market correction affected traders across the board, brought on by a combination of macroeconomic pressures and dwindling liquidity in decentralized markets that led to a $500 billion drop.
While hacks and exploits are usually viewed in isolation, the events of the past week show how on-chain markets, by design, apply the same rules to everyone: whether they are retail traders, whales, or hackers.
