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FTX was engulfed in more chaos yesterday when the crypto exchange said it had detected unauthorised access and analysts said hundreds of millions of dollars of assets had been moved from the platform in “suspicious circumstances”.
FTX filed for bankruptcy on Friday, one of the highest profile crypto blowups, after traders rushed to withdraw $6 billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal.
FTX chief executive John Ray III yesterday said the company was working with law enforcement and regulators to mitigate the problem, and was making “every effort to secure all assets, wherever located.”
“Among other things, we are in the process of removing trading and withdrawal functionality,” he said.
The exchange’s dramatic fall from grace has seen its 30-year-old founder Sam Bankman-Fried, known for his shorts and T-shirt attire, morph from being the poster child of crypto’s successes to the protagonist of the industry’s biggest crash.
The turmoil at FTX has seen at least $1bn of customer funds vanish from the platform, sources said.
Bankman-Fried had transferred $10bn of customer funds to his trading company, Alameda Research, the sources said.
New problems emerged yesterday when FTX’s US general counsel Ryne Miller said in a Twitter post that the firm’s digital assets were being moved into so-called cold storage “to mitigate damage upon observing unauthorised transactions.”
Cold storage refers to crypto wallets that are not connected to the Internet to guard against hackers.
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