FTX COLLAPSE

 

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$515m is STOLEN from crypto exchange FTX in matter of hours. Is it hackers or an inside job?

Paul Farrell

7 - 9 minutes

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$515m is STOLEN from collapsed crypto exchange FTX in matter of hours... but is it hackers or an inside job? New CEO locks down remaining funds in secure storage as FBI is called in and amateur sleuths try to track down thieves 

23:25 EST 12 Nov 2022 , updated 03:55 EST 13 Nov 2022

• In the latest twist in the downfall of crypto exchange FTX, internet sleuths discovered that $515 million has disappeared from the company's accounts
• Multiple reports suggest that the withdrawal bears the hallmarks of a hacker with a crypto security expert saying his company knows the identity of the user
• This comes hours after FTX's founder Sam Bankman-Fried resigned as CEO to be replaced by corporate firefighter John J. Ray III 

Internet sleuths have discovered that $515 million has disappeared from the accounts of collapsed crypto exchange FTX under 'suspicious circumstances.'

Company founder Sam Bankman-Fried resigned from FTX on Friday, as the crypto IIIexchange filed for bankruptcy and reports emerged that, separate to the missing $515 million, up to $2 billion in client funds had vanished from the company's books in recent weeks.

 

Nick Percoco, chief security officer of Kraken, was among the industry officials seemingly piecing the situation together. He said in a tweet: 'We know the identity of the user' who withdrew the funds from FTX. 

FTX's U.S. general counsel Ryne Miller then responded to that tweet: 'Interested in anything you are open to share. Could you reach out to me?' 

Enthusiasts invested in the manic crypto episode also took it upon themselves to examine public records and find out who may have hacked or stolen the millions of dollars.  

At the time of writing, Percoco has not elaborated further as to whether or not the withdrawal was the work of a hacker. Multiple reports have pointed out that the methods used to withdraw the money bear the hallmarks of a hacker.  

Meanwhile, FTX's new Chief Executive John J. Ray III, known for guiding Enron through bankruptcy in the 2000s, said on Saturday that the company was working with law enforcement and regulators to mitigate the problem, and was making 'every effort to secure all assets, wherever located.'

. . .

'Among other things, we are in the process of removing trading and withdrawal functionality,' he said. 

It's reported that Bankman-Fried, known for regularly wearing t-shirts and shorts, is holed up in the Bahamas as his empire continues to crumble. DailyMail.com has reached out to Bankman-Fried for comment. 

In 2022, Bankman-Fried was one of the biggest donors to the Democratic Party. 

On Saturday, Ryne Miller said in a Twitter post that the firm's digital assets were being moved into so-called cold storage 'to mitigate damage upon observing unauthorized transactions.'

Cold storage refers to crypto wallets that are not connected to the internet to guard against hackers.

Miller earlier tweeted that he was 'investigating abnormalities with wallet movements related to consolidation of FTX balances across exchanges.'  

Bankman-Fried had transferred $10 billion of customer funds to his trading company, Alameda Research.

The company is run by Bankman-Fried's girlfriend, Caroline Ellison. 

A large portion of that total has since disappeared, they said. One source put the missing amount at about $1.7 billion. The other said the gap was between $1 billion and $2 billion. 

Blockchain analytics firm Nansen said it saw $659 million in outflows from FTX International and FTX U.S. in the last 24 hours.

A separate blockchain analytics firm Elliptic said that around $515 million worth of cryptoassets were 'suspected to have been stolen,' while $186 million were likely moved into secure storage by FTX.

The firm described the movement of the funds as 'suspicious.' 

Crypto exchange Kraken said: 'We can confirm our team is aware of the identity of the account associated with the ongoing FTX hack, and we are committed to working with law enforcement to ensure they have everything they need to sufficiently investigate this matter.'

In its bankruptcy petition, FTX Trading said it has $10 billion to $50 billion in assets, $10 billion to $50 billion in liabilities, and more than 100,000 creditors.

Ray, a restructuring expert, was appointed to take over as CEO. . ."

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