3 SBF-related wallets swapped $90M stETH for Ethereum at height of market depeg

Blockchain security firm PeckShield identified three wallets that converted 63,860 staked Ethereum (stETH) — roughly $90 million — to Ethereum (ETH) when the stETH/ETH peg dropped to a monthly low between May 2022 and June 2022.

The firm said the three wallets withdrew the stETH from FTX, converted it to ETH, and then transferred the funds back to the exchange. It added that these transactions might be connected to FTX founder Sam Bankman-Fried (SBF).

The wallets’ transactions

When stETH/ETH dropped to $0.971 on May 13, 2022, “0x6b92” withdrew 15,000 stETH — worth $23.4 million — from FTX, swapped it for 14,300 ETH, and transferred it to FTX.

Two other wallets would carry out similar transactions when the stETH/ETH peg widened to $0.955 on June 11, 2022.

Peckshield said wallets “0x1b23” and “0x2e85” cumulatively withdrew 49,000 stETH worth $66 million from FTX, swapped them for 42,000 ETH, and returned the funds to FTX.

Alameda Research connection

A director at Coinbase, Conor Grogan, tweeted that two wallets withdrew over $75 million stETH from FTX on June 8, 2022, and sold everything on the market.

This move triggered a series of events that eventually affected bankrupt crypto lender Celsius and crypto hedge fund Three Arrows Capital, according to Grogan. He pointed out that the stETH depeg “led to a significant stress in the market,” adding that the crypto lender halted withdrawals just four days after the event.

“Alameda could have processed this trade OTC on behalf of Celsius or another big party.”

The previously unknown wallets became public after they sent ETH and stETH to the bankrupt exchange’s estate in January, according to Grogan.

However, the motive behind the swaps remains unknown. Alameda took a seven-figure slippage on the trade, which raises questions as to why the savvy crypto trading firm will make such a move, according to Grogan.