Bankrupt Crypto Exchange FTX Struggles To Stabilize What Money 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 the remaining funds and quarantine them somewhere where they can’t be randomly transferred elsewhere or siphoned off by a hacker. This comes after a deluge of information that has emerged in the past day that painted a picture of a financial institution filled with unprecedented amounts of chaos on seemingly every possible level.

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

On Saturday, Bankman-Fried (who also goes through SBF) rushed the rumors circulating Friday that he had fled to South America. He is still, he claims, in the Bahamaswhere FTX’s headquarters is located.

Not less than $1 billion value of clients’ cryptocurrency has apparently disappeared from FTX. And as a sort of icing on the cake, on Friday night, maybe FTX was infiltrated by hackers and robbed of $473 million. What remains of the company, according to its own tech support channel, is a largely unusable and potentially insecure website that could steal users’ money.

A little backwards: According to anonymous sources who work with Reuters and The Wall Street Journal yesterdayBankman-Fried has moved the equivalent of $10 billion from FTX to an FTX-affiliated trading house also founded by Bankman-Fried called Alameda Researchthat’s now down.

It Now Looks Like Money Movement Played a Role in Binance CEO Changpeng Zhao’s now infamous anti-FTX tweetstormannouncing to millions that “recent revelations” had caused his company to essentially lose all faith in FTX.

But the recently revealed missing $1 billion looks like a unexplained portion of that $10 billion that had been moved to Alameda. Both FTX and Alameda Research were already under investigation by the Securities and Exchange Commission when all of this was made public.

Amid those late Friday night revelations – or, who knows, maybe… because from them – an additional announcement came on the company’s Telegram technical support accountTo: “FTX has been hacked. FTX apps are malware. Remove them. Chat is open. Do not go to the FTX site as it can download trojans.”

Giving extra credibility to the Telegram messages was a tweet from FTX general counsel Ryne Millersaying that he “is investigating abnormalities with wallet movements linked to consolidation of FTX balances on exchanges.”

Pure speculation from high-profile accounts on crypto Twitter has hinted that the hack is actually an FTX insider or insiders, take everything they can from the corpse of FTX when they go out the door.

On Saturday afternoon, ET, Miller tweeted a statement from John Ray, FTX’s newly appointed crisis CEO charged with stabilizing the burgeoning company.

According to Ray, the company is now trying to “secure all assets, wherever” because of “unauthorized access”. According to Ray, FTX is now in the process of shutting down and withdrawing funds and moving all crypto to a “cold wallet custodian” where the funds are not easily accessible, but at least they won’t suddenly disappear.

oh and the police are aware, according to Ray’s statement. And in addition to law enforcement, an internal “fact assessment and mitigation exercise” was immediately launched in response to the hack, he explained.

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

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