• Blockchain Bandit consolidates 51,000 ETH into a multi-signature wallet.
• Hacker exploits weak private keys, steals over 50,000 ETH since 2018.
• Reappearance could signal laundering or liquidation of stolen funds.

After five years of silence, the notorious Blockchain Bandit hacker has returned and transferred $172 million in stolen Ethereum. This sudden activity has raised concerns in the crypto world about potential future exploits and market disruptions.

The infamous “Blockchain Bandit” has resurfaced after more than five years of inactivity. Recently, the hacker transferred 51,000 ETH worth over $172 million, from ten wallets to a single multi-signature wallet. This marks the first major transfer from these wallets since 2018, which has raised concerns with the cryptocurrency space.

The attacker is known for exploiting weak private keys on the Ethereum blockchain. He used automated scripts to scan the network for wallets that had poorly generated private keys, which were vulnerable to attack. After identifying the wallets, the attacker swiftly transfers funds from these wallets to his own address and which the victims may not notice immediately.

This approach enabled the hacker to steal more than 50,000 ETH from more than 10,000 wallets. The stolen funds were distributed across various wallets until the recent consolidation. The last known activity for most of these wallets occurred in 2018 although some of them were also used to purchase Bitcoin in the first quarter of 2023. The sudden activity and transfer of such a large amount of stolen ETH has attracted significant attention.

The  transfer of funds into a multi-signature wallet could signal several possible outcomes. It may indicate the hacker is preparing for large transactions such as laundering the stolen ETH through mixers or decentralized exchanges. This would enable the attacker to avoid detection and hide the source of the funds.

The hacker could also be preparing to liquidate some or all of the funds, especially if Ethereum’s market conditions are favorable. A massive liquidation could impact Ethereum’s price and create market instability. However, there is also a concern that the hacker could use the funds for further malicious activities such as executing new cyber attacks on Ethereum or other blockchains.

The recent reactivation of the Blockchain Bandit’s wallets also raises concerns about how the hacker maintained access to the stolen ETH. Some believe the attacker may have stored the keys to these wallets securely and waited for a favourable market opportunity. The hacker is known for exploiting weak private keys thus the funds may have been concealed for years in other less scrutinized wallets.

The return of such a notorious figure shows that the cryptocurrency space is still dangerous for investors. In 2024, the industry saw a record $2.3 billion in thefts, with Ethereum being the most affected network. The activity of the Blockchain Bandit could serve as a reminder of the vulnerabilities that continue to exist on blockchain platforms, despite efforts to improve security.

Currently, the crypto community is on the lookout for the movement of the stolen funds and possible attacks in the future. The reactivation of these wallets could indicate that the Blockchain Bandit is preparing to re-launch attacks. This development has prompted more discussions about the need for better security measures in the blockchain ecosystem.