FTX collapse worsens after $600 million hack and criminal charges

FTX collapse worsens after 0 million hack and criminal charges

Bankrupt cryptocurrency exchange FTX confirmed an authorized hack that potentially drained around $600 million from the exchange’s wallets.

Important takeaways

  • Bankruptcy FTX remains troubled after hackers took $600 million from the exchange.
  • The new CEO and restructuring chief of the beleaguered cryptocurrency exchange, John Jay Ray III, is halting crypto withdrawals to mitigate the effects of the hack.
  • The Security and Exchange Commission (SEC) is putting Sam Bankman-Fried under investigation. The crypto exchange is facing criminal charges in the Bahamas.

Binance comes to the rescue

The attack took place in the late hours of Friday night after FTX’s bankruptcy filing.

“FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Do not go to FTX website as it may download trojans,” wrote an account admin in the FTX Support Telegram group.

Hours later, FTX general counsel Ryne Miller tweeted that the crypto exchange was making “every effort to secure all assets, wherever they are located.”

To help FTX’s projects from a liquidity crisis, Binance CEO Changpeng Zhao on Monday announced an “Industry recovery fund” to reduce the “cascading negative effects of FTX” which helps projects with a solid foundation and structure but experiencing a liquidity crisis to survive. The fund details should come soon, the CEO said.

FTX under security control

The FTX problems do not end here, as the Security and Exchange Commission (SEC), along with the Commodity Futures Trading Commission (CFTC), is currently investigating the integrity of the FTX exchange, whether it is mismanaging users’ funds and what is the relationship between FTX. com and FTX.US, according to a report from Bloomberg. In addition, the Ministry of Justice (DOJ) has put the unit under investigation and is investigating the issue of possible fraud.

Furthermore, in the Bahamas, where Sam Bankman-Fried’s FTX is headquartered, the police and the Securities and Exchange Commission are investigating the possibility of criminal activity.

Crypto chaos continues

Twitter is not silent, and has been a source of real-time updates on the chaotic FTX saga, even Twitter CEO Elon Musk noted this, saying, “FTX meltdown/search is being tracked in real-time on Twitter.”

#FTX was used over the weekend to vent anger and dissatisfaction with the exchange. Prominent personalities such as Mark Cuban expressed their dismay. In a Twitter poll from Internet Mogul, Kim Dotcom questioned whether former billionaire founder Sam Bankman-Fried would — spend 1,000 years behind bars or be let off the hook for being a Biden donor — 86% of 67,312 people voted for the latter .

The bottom line

The ongoing FTX chaos has fed the entire crypto market into turmoil. FTX’s native token, FTT, plunged 93.3% in the past week from $22 to $1.49 per data from CoinGecko. Bitcoin fell to the 15,000 range, the lowest record for the year.

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