Following the digital theft of more than $600 million in tokens from wallets on its platform, collapsing cryptocurrency exchange FTX has begun moving assets from its platform into cold storage.
On Friday, the exchange filed for bankruptcy protection from creditors, and then immediately “initiated precautionary steps to move all digital assets to cold storage,” according to Ryne Miller, general counsel for the firm’s US division. He noted, the “process was expedited this evening to mitigate damage upon observing unauthorized transactions.” He added the exchange was “investigating abnormalities with wallet movements related to consolidation of FTX balances across exchanges.”
However by that point, $662 million had flowed out of FTX’s US and international exchanges, according to an analysis by research firm Nansen. The firms main wallet, the balance of which was used to process withdrawals from the platform, was emptied of its entire balance of 45.8 million FTT tokens, which was estimated to be worth $97.2 million, according to Nansen.
Another review completed by analytics firm Elliptic Connect, claimed the thefts had totaled $473 million. On Telegram, the FTX Community administrator acknowledged the exchange had been hacked by malicious actors. The administrator went on to warn the FTX applications had been infected with malware, and he advised against even opening the exchange’s website for security reasons.
Based out of the Bahamas, FTX and roughly 130 affiliated companies began Chapter 11 bankruptcy proceedings in Delaware on Friday. Billionaire CEO Sam Bankman-Fried was also announced to have left his position.
According to a Bloomberg analysis, Bankman-Fried has seen his entire $16 billion fortune wiped out this week. Bloomberg called the collapse of FTX “one of history’s greatest-ever destructions of wealth.”
At press time additional rumors have ben swirling related to the collapse. The Daily Mail is reporting Bankman Fried may have transferred as much as $10 billion of FTX assets to a trading firm run by his girlfriend and that $2 billion of those funds are presently missing. Bankman Fried has declined to comment about the missing funds, saying only his firm had ‘confusing internal labeling.’
