FTX Hit by Nine-Figure Hack as Meltdown Continues

FTX Hit by Nine-Figure Hack as Meltdown Continues

Important takeaways

  • FTX has been hacked.
  • Over $400 million was drained from the cryptocurrency exchange early Saturday. Employees have moved remaining assets to cold storage.
  • Some have suggested that the incident could be an inside job due to the ongoing FTX meltdown.

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FTX.US General Counsel Ryne Miller said assets had been moved to cold storage “to reduce harm from observing unauthorized transactions.”

FTX suffers from major hacks

FTX, the collapsed cryptocurrency exchange that has been at the center of a rapidly developing drama this week, has been hacked.

Hours after the embattled firm announced it was filing for Chapter 11 bankruptcy, a number of on the chain scouts took to Twitter to point out a series of suspicious outflows from the exchange to external wallets. Although the full extent of the damage is still unknown, over $400 million was moved to addresses on Ethereum, Solana, BNB Chain and other crypto networks. “FTX has been hacked. All funds appear to be gone,” wrote an admin from Rey on the exchange’s official Telegram channel. According to the admin, FTX’s app was also affected. “FTX apps are malware. Delete them,” they wrote.

FTX.US Attorney General Ryne Miller addressed the incident on Twitter early Saturday, says that some of the company’s remaining employees “investigated wallet movement abnormalities.” He later followed up by confirming that team members had moved assets on FTX and FTX.US to cold storage “to reduce damage from observing unauthorized transactions.”

Due to the nature of the hack, which allowed the attackers to access the exchange to drain hundreds of millions of dollars across multiple networks, some have speculated that the incident may have been an inside job. “Several former FTX employees confirmed to me that they do not recognize these transfers,” the chain investigates ZachXBT tweeted.

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Shortly after the hack, Tether froze USDT worth $31.4 million transferred in the incident. Elon Musk too weighed inand noticed that the hack was tracked in real time on Twitter.” Binance CEO Changpeng “CZ” Zhao also posted a tweet that appeared to allude to the incident, taking the opportunity to take a shot at former FTX CEO Sam Bankman-Fried. “What a dirty show… And it’s going to be crypto’s fault, (rather than a guy’s fault)…” he tweeted.

The hack news comes after a week of chaos in the crypto market caused by FTX’s collapse. This week it emerged the stock exchange was insolvent after former chief executive Sam Bankman-Fried used billions of dollars worth of client funds to bail out his trading company, Alamada Research. The firm filed for bankruptcy Friday while Bankman-Fried resigned. Alameda is also winding down. The FTX situation is still evolving at a rapid pace, and US agencies such as the Department of Justice and the Securities and Exchange Commission are investigating the events.

This story is developing and will be updated as more details emerge.

Disclosure: At the time of writing, the author of this piece owned ETH, USDT and several other crypto assets.

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