Bankrupt crypto exchange FTX tries to stabilize what funds it still has after being ‘hacked’

Bankrupt crypto exchange FTX tries to stabilize what funds it still has after being ‘hacked’

The shell of the fallen crypto exchange FTX can’t do much anymore, but it’s trying to get hold of any remaining funds that can be scraped up, and quarantined somewhere where they can’t be randomly transferred elsewhere or siphoned off by a hacker. This comes after a flurry of information emerged over the past 24 hours that painted a picture of a financial institution full of unprecedented amounts of chaos on seemingly every possible level.

FTX’s founder and recently resigned CEO, Sam Bankman-Fried, for his part, is “really sorry”.

On Saturday, Bankman-Fried (who also retires from SBF) was quick to quash rumors circulating on Friday that he had fled to South America. He is still, he claims, in the Bahamas, where FTX is headquartered.

No less than $1 billion of customers’ cryptocurrency apparently disappeared from FTX. And as a sort of cherry on top, on Friday night, FTX may have been infiltrated by hackers and stolen $473 million. What remains of the company, according to its own technical support channel, is a largely useless and potentially insecure website that could steal users’ money.

Going back a bit: According to anonymous sources who have spoken to Reuters and The Wall Street Journal yesterday Bankman-Fried moved the equivalent of $10 billion from FTX to an FTX-affiliated trading house also founded by Bankman-Fried called Alameda Research, which is now down.

It now appears that the movement of funds played a role in Binance CEO Changpeng Zhao now infamous anti-FTX tweetstormwhere he announced to millions that “recent revelations” had caused his company to essentially lose all faith in FTX.

But the recently revealed missing $1 billion appears to be an unaccounted for portion of the $10 billion moved to Alameda. Both FTX and Alameda Research were already under investigation by the Securities and Exchange Commission when all this was made public.

In the midst of these revelations late on Friday night – or, who knows, maybe because of them — came an additional announcement on the company’s tech support Telegram account: “FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Do not access the FTX website as it may download Trojans. “

Giving additional credibility to the Telegram messages was one tweet from FTX General Counsel Ryne Millerand said he was, “Investigating wallet movement abnormalities related to consolidation of FTX balances across exchanges.”

Pure speculation from high-profile accounts on crypto Twitter have suggested that the hack is indeed one or more FTX insiders, stripping away what they can from FTX’s corpse on the way out the door.

Saturday afternoon, ET, Miller tweeted a statement from John Ray, the newly appointed crisis manager at FTX, who is tasked with stabilizing the spiraling company.

According to Ray, the company is now seeking to “secure all assets, wherever they are located” due to “unauthorized access.” FTX, according to Ray, is now starting work to close trading and fund withdrawals and move all crypto to a “cold wallet custodian”, where the funds are not easily accessible, but at least they will not suddenly disappear.

Oh, and the police have been notified, according to Ray’s statement. And in addition to law enforcement, an internal “fact review and mitigation exercise was launched immediately in response” to the hack, he explained.

In other words: FTX is trying to find the guy who did this.

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