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Bankrupt crypto exchange FTX says $415 million in crypto was hacked

Bankrupt crypto exchange FTX says $415 million in crypto was hacked

Some $323 million in crypto had been hacked from FTX's international exchange and $90 million had been hacked from its US exchange since it filed for bankruptcy on Nov. 11, CEO John Ray said.

FTX founder Sam Bankman-Fried has been accused of stealing billions of dollars from FTX customers to pay debts incurred by his crypto-focused hedge fund, Alameda Research. FTX founder Sam Bankman-Fried has been accused of stealing billions of dollars from FTX customers to pay debts incurred by his crypto-focused hedge fund, Alameda Research.

Bankrupt crypto exchange FTX said in a report to creditors on Tuesday that about $415 million in cryptocurrency had been stolen as a result of hacks.

Some $323 million in crypto had been hacked from FTX's international exchange and $90 million had been hacked from its US exchange since it filed for bankruptcy on Nov. 11, CEO John Ray said in a separate statement on Tuesday.

FTX founder Sam Bankman-Fried has been accused of stealing billions of dollars from FTX customers to pay debts incurred by his crypto-focused hedge fund, Alameda Research. Bankman-Fried has pleaded not guilty to fraud charges.

FTX told a bankruptcy judge in Delaware last week that it had recovered over $5 billion in crypto, cash and liquid securities, nine weeks after declaring bankruptcy.

The company provided additional details on Tuesday, saying it had recovered $1.7 billion in cash, $3.5 billion in liquid cryptocurrency and $300 million in liquid securities.

FTX did not provide an estimate of total liabilities, but said it had identified important significant shortfalls at both its international and US crypto exchanges.

"We are making progress in our efforts to maximize recoveries, and it has taken a Herculean investigative effort from our team to uncover this preliminary information," Ray said in the statement.

The crypto assets recovered to date include $685 million in Solana, $529 million in FTX's proprietary FTT token and $268 million in bitcoin, based on crypto prices on Nov. 11, 2022. Solana, which was lauded by Bankman-Fried, lost most of its value in 2022.

During FTX's initial investigation into hacks of its system, it uncovered a November asset seizure by the Securities Commission of the Bahamas, which led to a dispute between FTX's US-based bankruptcy team and Bahamian regulators.

The two sides settled their differences in January, and Ray said on Tuesday that the Bahamian government was holding $426 million for creditors.

Bahamas Prime Minister Philip Davis referenced the dispute during a Tuesday event at the Atlantic Council in Washington, saying that Ray's team had "come around" and accepted that the Bahamian asset seizure "was appropriate and perhaps has saved the day for many of the investors in FTX."

Published on: Jan 18, 2023, 7:14 AM IST
Posted by: Mehak Agarwal, Jan 18, 2023, 7:09 AM IST