Failed crypto exchange FTX hacked, reports say

Failed crypto exchange FTX hacked, reports say

Cryptocurrency exchange FTX said in its official Telegram channel that it had been hacked and instructed users not to install any new upgrades and to delete all FTX apps, according to a report by Coindesk.

FTX and FTX US wallets appear to have been hacked, with more than $600 million leaving the exchange late Friday, the report said.

“FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Do not go to FTX website as it may download trojans,” an account admin wrote in the FTX support Telegram chat. The message was pinned by FTX General Counsel Ryne Miller.

Miller also tweeted on Saturday that the exchange was investigating anomalies with wallet movements related to the consolidation of FTX balances across exchanges.

“Investigating wallet movement abnormalities related to consolidation of FTX balances across exchanges – unclear facts as other movements not clear. Will share more information as soon as we have it,” the tweet said.

According to on-chain data, various Ethereum tokens as well as Solana and Binance Smart Chain tokens have left FTX’s official wallets and moved to decentralized exchanges such as 1inch, the Coindesk report said.

Both FTX and FTX US appear to be affected, it added.

The transfers come on the same day that Bahamas-based FTX began bankruptcy proceedings in the US following its collapse this week.

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Many FTX wallet holders also report seeing $0 balances in their and FTX US wallets, Coindesk reported.

FTX’s API appears to be down, which could explain this, the report says.

“At midnight Eastern Time, FTX’s login portal was unavailable [the site is still online]and gave users a 503 error when trying to log in,” Coindesk said.

“A 503 error occurs when the server is unavailable, often because it is down for maintenance or unavailable for access.”

FTX CEO Sam Bankman-Fried has resigned from his position, the company said Friday in a statement posted on the Twitter page.

A bailout deal with rival exchange Binance fell through, sparking crypto’s highest-profile collapse in recent years.

“FTX Trading Ltd, West Realm Shires Services, Alameda Research and approximately 130 other affiliated companies have commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the District of Delaware,” the statement said.

The company will start “an orderly process to assess and monetize assets for the benefit of all global stakeholders”, it said.

John J Ray III has been appointed chief executive of FTX Group, the company said, adding that Mr Bankman-Fried will remain to “assist in an orderly transition”.

“The immediate relief of Chapter 11 is appropriate to allow FTX Group the opportunity to assess the situation and develop a process to maximize recovery for stakeholders,” Ray said.

Meanwhile, Reuters reported that at least $1 billion of client funds have disappeared from FTX, citing sources.

Bankman-Fried secretly transferred $10 billion in client funds from FTX to his trading firm Alameda Research, the sources told Reuters.

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

The financial hole was revealed in records Mr Bankman-Fried shared with other senior executives last Sunday, according to the two sources.

In a tweet on Friday, Mr Bankman-Fried said he was “putting together” what had happened at FTX.

“I was shocked to see things unravel the way they did earlier this week,” he wrote. “I’ll be writing a fuller play-by-play post soon.”

Samuel Bankman-Fried, founder and CEO of FTX, secretly transferred $10 billion of client funds from the crypto exchange to his trading company Alameda Research, Reuters reported.  AFP

Updated: 12 November 2022, 06:27

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