Crypto Exchange FTX Has Allegedly Lost Around $477 Million During a Hack

Crypto Exchange FTX Has Allegedly Lost Around $477 Million During a Hack

FTX is reportedly working with law enforcement and "relevant regulators" to investigate the matter.

FTX, a Bahamian cryptocurrency exchange established in 2019, reportedly got hacked over the weekend.

According to a tweet shared by crypto analytics firm Nansen, unauthorized transactions were first noticed on November 12th, with $266.3 million leaving the crypto exchange FTX. The company’s US subsidiary, FTX US, has also been drained for $73 million.

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However, it seems that the alleged hack didn’t stop there. Nansen journalist Martin Lee noted that on November 12th, FTX and FTX US jointly recorded an outflow of $659 million. According to the data shared on Lee’s tweet, at that time, the recorded transactions were responsible for 33% of all FTX and FTX US outflows recorded during the last seven days.

On November 12th, FTX US General Counsel Ryne Miller shared a tweet claiming that recorded transactions were unauthorized and all remaining digital assets were moved to cold wallets.

In a further Twitter thread citing newly appointed FTX Chief Executive Officer John Ray, Miller noted that companies are in contact and are coordinating the situation with law enforcement and “relevant regulators.”

Following the news, a London-based blockchain analytics firm Elliptic Connect shared a blog post reporting the damage crypto exchanges may have experienced. According to Elliptic Connect, FTX wallets were drained on Ethereum, Binance Smart Chain, and Avalanche

The company noted that it is believed that out of $663 million, $477 million were stolen, with $186 million moved by FTX.

Shortly after the news about a possible hack broke, Kraken’s Chief Security Officer Nick Percoco tweeted that the company knows the identity of the hacker.

The last week was, without a doubt, the hardest week for FTX. On November 6th, Binance founder and CEO Changpeng Zhao announced that his company plans to liquidate all of its FTX native token, FTT, holdings. On November 8th, to everyone's surprise, FTX's former CEO Sam Bankman-Fried announced that Binance is looking to acquire FTX

However, the acquisition plans did not last long. On November 9th, Binance announced that it is stepping away from its plans to acquire FTX due to “reports regarding mishandled customer funds and alleged US agency investigations.” Finally, on November 11th, FTX started Chapter 11 bankruptcy proceedings.

Gile K. - Crypto Analyst

by Gile K. - Crypto Analyst, BitDegree