FTX said it lost $415 million in cryptocurrency cyber attack
A significant amount of the identified assets the bankrupt cryptocurrency firm FTX is attempting to recover were stolen from the exchange’s accounts, the company disclosed on Tuesday, totalling $415 million in cryptocurrency.
Lawyers and consultants representing FTX debtors updated the total liquid assets identified for recovery and stated that they are valued at roughly $5.5 billion in a presentation titled “Maximizing FTX Recoveries.”
However, according to a statement from the corporation, that also includes unauthorised third-party transfers” of $323 million from FTX.com (the foreign business) and $90 million from FTX US. According to hedge fund Alameda Research, an additional $2 million in cryptocurrency was also taken. The stolen cryptocurrency may be linked to a system compromise discovered after FTX’s demise. Elliptic, a blockchain analytics company, estimates that the stolen cryptocurrency was worth $477 million.
A rush of withdrawals destroyed FTX and its sibling hedge fund Alameda, leading to the filing of bankruptcy. Federal prosecutors filed an indictment in December charging founder and former CEO Sam Bankman-Fried with fraud and money laundering. On the accusations, Bankman-Fried entered a not-guilty plea earlier this month. Before his October trial, he was released on a $250 million bail. The $2.1 billion share repurchase payment that FTX will make to the cryptocurrency exchange Binance in the third quarter of 2021 is also being evaluated by FTX’s advisors. Binance was FTX’s initial outside investor, but Bankman-Fried acquired Binance’s share of the business in 2021.
Changpeng “CZ” Zhao, the CEO of Binance, was questioned about the potential $2.1 billion clawback during an appearance on CNBC in December. Zhao declined when asked if he would return the money, saying, “I guess we’ll leave that to the attorneys.” “I believe our legal team is fully qualified to handle it,” A breakdown of FTX’s assets and a description of where the company’s lawyers and consultants are looking for potential recoveries that may be paid back to creditors are included in the 20-page presentation. This includes real estate in the Bahamas, where Bankman-Fried resided and oversaw the business, valued at hundreds of millions of dollars.
John Ray, who is serving as FTX’s interim CEO during the restructuring, said in a statement on Tuesday that “we are making significant headway in our efforts to optimize recovery” and that it had taken a “Herculean investigative effort” from our team to find this early evidence. FTX‘s self-issued token, FTT, was listed under the exchange’s “liquid” assets in the presentation even though it was divided into liquid and illiquid tokens valued at $529 million. Since early November, FTT’s value has decreased by more than 90%.
