FTX gets hacked, sees crypto holdings disappear – “All funds appear to be gone. FTX apps are malware.”
There’s nothing like kicking someone when they’re down.
It is currently being reported that FTX is about to be hacked, with at least one administrator of an FTX Community Chat on Telegram confirming the incident.
The Telegram admin, who goes by the name Rey, commented: “FTX has been hacked. All funds seem to be gone. FTX apps are malware. Delete them. The chat is open. Do not go to the ftx website as it can download trojans.”
Given that the crypto wallet addresses are currently known by the crypto public, users have been tracking movements in the wallet for the past few hours. A Twitter user, @Dogetoshi, initially highlighted it by suggesting that liquidators could start the bankruptcy process.
However, suspicions quickly grew after the wallet first exchanged $26.1 million in Tether for DAI, before moving on to sell stETH and transfer $53.0 million in Solana funds to a new address. After several transactions, Ryne Miller, General Counsel for FTX US, indicated that the firm was “investigating abnormalities with wallet movements related to the consolidation of ftx balances across exchanges.”
Twenty minutes later, it was suggested by many in the crypto world to uninstall the FTX app from mobile devices, suggesting that an automatic update was pushed to devices, potentially containing malware. At the same time, funds leaving FTX wallets quickly grew to hundreds of millions of dollars in the form of several coins, including DAI, USDC and USDT.
Separately, it was reported by Reuters this evening that at least $1.0 billion in client funds are missing from FTX, believed to be unrelated to the ongoing hack. Of the $10 billion known to have been transferred from FTX to Alameda Research, the firm’s sister hedge fund, a “large portion” is said to have disappeared, with one source placing the missing funds at between $1.0 billion and $2.0 billion dollars, while another source placed the missing funds at $1.7 billion.
The discovery of missing funds was reportedly identified in a spreadsheet provided by Bankman-Fried to investors on Sunday. Information on where the money was moved to was not provided, with FTX’s legal and finance teams reportedly later discovering that a “backdoor” had been installed in the firm’s bookkeeping system, which was of course built using bespoke software.
READ: FTX Group Files for Chapter 11 Sam Bankman-Fried Resigns
The backdoor allegedly allowed SBF to change financial records without notifying other people, said to include external auditors. This allowed the transfer of funds from FTX to Alameda to occur without internal compliance or accounting red flags appearing.
In a message to Reuters, SBF has allegedly denied that such a back door exists.
As for the FTX hack, some members of the crypto industry are simply not having it.
Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author has no licenses.
As the founder of The deep dive, Jay is focused on all aspects of the firm. This includes operations, as well as serving as lead writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay does freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.