FTX founder secretly moved $10 billion of client funds to his firm, over $1 billion missing: Report

FTX founder secretly moved  billion of client funds to his firm, over  billion missing: Report

About US$1 billion in client funds has disappeared from troubled cryptocurrency exchange FTX, Reuters reported citing top official sources. The exchange’s founder Sam Bankman-Fried secretly transferred $10 billion of client funds from FTX to Bankman-Fried’s trading firm Alameda Research, the people told Reuters. A large portion of the $10 billion has since disappeared, sources said, with one saying the missing amount was around $1.7 billion and the other revealing it was somewhere between $1 billion and $2 billion.

Meanwhile, FTX has said on its Telegram channel that the crypto platform has been hacked and that there is a discrepancy of USD 600 million in funds as they were ‘transferred’.

The “transfers” occurred on the same day that FTX formally filed for Chapter 11 bankruptcy protection after allegedly losing billions of dollars in user payments. The transfers have not been officially approved by FTX management.

See | Binance Walks Away from FTX Deal Due to ‘Mishandled Funds’

According to Coindesk, the incident happened on Wednesday. Although not much information is available about what happened, the company announced on its Telegram channel that it had been hacked and advised customers to avoid installing new updates and delete any FTX apps as well.

“FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Do not go to the FTX website as it may download trojans,” said a forum administrator in the FTX Support channel.

Read also | Crypto Collapse: ‘Gold Standard’ FTX Files For Bankruptcy, CEO Quits

The message was then allegedly pinned by FTX General Counsel Ryne Miller.

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Miller had previously tweeted that he was “investigating wallet movement abnormalities related to consolidation of FTX balances across exchanges.”

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In another tweet on Saturday, Miller said the exchange was expediting the move of all digital assets into cold storage “to reduce damage from observing unauthorized transactions.”

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Read also | Crypto-exchange FTX’s troubles are far from over; top US financial watchdogs investigate the handling of client assets

Cryptocurrency wallets that are not online are referred to as being in “cold storage”, these are used to ward off hackers.

According to a Reuters report citing data from Singapore-based research firm Nansen, there was a one-day net outflow of about $266 million, with $73 million drawn from FTX US alone.

(With input from agencies)

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