ZachXBT tracked $40 million in crypto linked to a $140 million fiat theft in Brazil following a cyberattack on banking software.
About $5 million worth of crypto assets were frozen through joint efforts by Binance, Tether, Bitso, Bybit, and Chainalysis.
Circle did not participate in the recovery efforts, drawing criticism from ZachXBT as investigations proceeded without formal government support.
A cyberattack targeting C&M, a technology provider connected to Brazil’s Central Bank, resulted in the theft of $140 million in fiat currency. The breach occurred on June 30, affecting six financial institutions that used the compromised software.
According to a developer’s statement, hackers gained full access to critical banking systems after purchasing employee credentials for only $3,000. This internal access enabled them to transfer large sums without immediate detection by authorities or banks.
$40M Converted Into Crypto Traced by ZachXBT
Blockchain investigator ZachXBT revealed that about $40 million of the stolen fiat funds were quickly converted into cryptocurrencies. These included Bitcoin, Ethereum, and Tether. The conversion went undetected initially, with no early alerts issued publicly.
ZachXBT began tracing the stolen crypto by observing abnormal volume spikes across Brazilian exchanges on the same day as the breach. By manually monitoring hot wallet transactions, he linked the crypto activity to the bank theft timeline.
Through cooperation with Binance, Bitso, Bybit, Tether, and Chainalysis, approximately $5 million in crypto assets have been frozen. These funds were spread across multiple blockchains and centralized exchanges. The frozen amount only reflects assets recovered at this stage.
Circle Criticized for Non-Cooperation
While most platforms assisted in halting the flow of stolen funds, Circle received public criticism from ZachXBT for not participating in the tracking process. He noted that Circle’s leadership did not support the investigation despite its relevance to the broader crypto sector.
With no early involvement from government authorities, much of the investigation was conducted by independent analysts and private firms. ZachXBT’s tracing work played a central role in identifying and limiting the laundering operation.
Although the magnitude of the incident was big, Brazilian authorities have yet to provide any additional information on the suspects and have not made any arrests in relation to the laundering. The activity of the wallets is still observed, and the investigation is still ongoing.
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