FTX filed for bankruptcy in the U.S. on Nov. 11, 2022, seeking court protection as it looks for a way to return money to users.

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Hackers who stole around $477 million worth of cryptocurrency from collapsed exchange FTX have started to launder the funds into bitcoin.

This month, after FTX filed for bankruptcy, new CEO John Ray III said that “unauthorized access to certain assets has occurred.”

Blockchain analytics company Elliptic estimates that around $477 million worth of cryptocurrency had been stolen from FTX.

The theft adds insult to injury to FTX, a once $32 billion crypto empire who collapse has sent shockwaves across the industry.

The stolen money has been converted into different digital coins but the bulk of it — more than $280 million — was changed into the cryptocurrency ether, according to public blockchain records of the account linked to the hackers.

Tom Robinson, co-founder of Elliptic, told CNBC that the hackers were converting the ether into a crypto product called RenBTC which is then being converted into bitcoin via a bridge. This allows one crypto to be converted into another without going through a centralized exchange.

“This is a common tactic in the laundering of crypto thefts,” Robinson said.

So far, $74 million has been moved to bitcoin from RenBTC.

Hackers are some point will want to cash that money out into fiat. However, Robinson said that will be “challenging” due to the “traceability of crypto.”

He said that he expects the hackers to use “mixers to cover their blockchain trail.”

Mixers are services or software that allow a crypto transaction trail to be obfuscated on the blockchain, making it difficult or impossible to trace these funds, Robinson said.

“This may be one of the motivations behind moving these assets to bitcoin — the greater availability of mixing services,” he added.

The blockchain is a public ledger of crypto activity. Each coin may have its own blockchain. That makes it possible to trace, to an extent, where funds are moving. The use of mixers could make this difficult.

Crypto compliance software company Chainalysis in a tweet on Sunday also confirmed that hackers are moving funds.

FTX on Sunday urged cryptocurrency exchanges to keep an eye out for the stolen funds if the hackers try to process the money via one of their services.

“Exchanges should take all measures to secure these funds to be returned to the bankruptcy estate,” FTX said in another tweet.

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