FTX says it’s probing ‘unusual transactions’ after a possible hack

FTX is investigating unusual transactions as analysts say hundreds of millions of dollars worth of assets have been withdrawn, a fresh blow to the creditors of crypto empire Sam Bankman-Fried. when the empire went bankrupt.

The company’s general counsel, Ryne Miller, said Saturday that FTX is “investigating irregularities with wallet movements related to the consolidation of FTX balances across exchanges.”

Elliptic, a blockchain forensics firm, said there were early indications that $473 million in crypto assets was stolen by FTX Friday night.

The announcements raised fears that FTX had been hacked as employees raced to secure billions of digital tokens that would eventually be used to pay creditors in bankruptcy proceedings at the corporation. cryptocurrency, which was only recently valued at $32 billion.

Tether, one of the major miners of the US dollar-linked cryptocurrency, says it intervened to freeze $31.4 million in tokens it suspects were moved by a FTX hackers.

A token theft could deepen the losses faced by customers and creditors of FTX, which was until this week one of the largest digital asset exchanges but filed for bankruptcy protection in the United States on Friday after being unable to meet a sudden spike in customer withdrawal requests.

“After filing for Chapter 11 bankruptcy, FTX US and have initiated precautionary steps to move all digital assets over [offline] warehouse. This process has been accelerated [Friday] evening — to minimize the damage of observing unauthorized transactions,” Miller said in tweets later shared by the main FTX account.

Miller declined to comment further.

Concerns about the possibility of being hacked increased after an admin in the Telegram support group for FTX declared: “FTX has been hacked” and warned users to stay away from the FTX website and app.

FTX is widely used not only by do-it-yourself traders but also by hedge funds and other sophisticated digital asset players. Galois Capital, a hedge fund whose founder is said to have discovered the luna cryptocurrency crash earlier this year, told investors this week that nearly half assets stuck on FTX.

Genesis, a popular cryptocurrency exchange, has about $175 million locked in its FTX account, the company said.

Bankman-Fried stepped down as chief executive of FTX on Friday after bringing the exchange, along with his trading firm Alameda and 130 related institutions, to Chapter 11 proceedings in Delaware.

The 30-year-old businessman, once one of the most respected figures in digital assets with close ties to Washington lawmakers, will be replaced by John J Ray, a restructuring expert. , who oversaw the bankruptcies of Enron and Nortel Networks.

Ray said on Friday that FTX Group “has valuable assets that can only be effectively managed within a common, organized process”.

According to the filing, the loss of assets caused by creditors would mark an early setback for the team overseeing the widespread insolvency, which involves up to $50 billion in assets and liabilities. and 100,000 creditors.

The US Securities and Exchange Commission is also investigating FTX, which includes the platform’s crypto lending products and customer money management, according to a person familiar with the matter.

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