Late on Friday, well over $600 million was stolen from the cryptocurrency wallets owned by FTX. Shortly thereafter, FTX announced on its authorized Telegram channel that the company had been hacked and instructed users to remove any FTX applications as well as refrain from downloading any further updates.
The majority of the funds were transferred from Tether (USDT) into stablecoin DAI, and from staked Ethereum (stETH) into Ether (ETH).
On Saturday, the chief counsel for the firm, Ryne Miller, said that FTX was conducting an investigation into irregularities with wallet movements relating to the aggregation of FTX holdings across exchanges. On the very same day, FTX filed its petition for Chapter 11 bankruptcy.
The term cold storage refers to digital wallets that are used to store cryptocurrency offline, away from the reach of hackers. Miller has also said that the platform is speeding up the process of moving all virtual currencies into cold storage in an effort to limit the amount of harm that may result from the discovery of illicit transactions.
Customers and creditors of FTX, who up until the ongoing crisis was the world’s second-biggest cryptocurrency exchange but has now filed for bankruptcy protection in the United States due to its inability to handle a rise in consumer withdrawals, might face even greater losses as a result of a theft of FTX tokens.
Following the Chapter 11 bankruptcy filings, FTX US and FTX.com initiated precautionary steps to move all digital assets to [offline] storage. Process was expedited this [Friday] evening — to mitigate damage upon observing unauthorized transactions
Ryne Miller
Alameda Research, a crypto trading business associated with FTX, and over 130 other entities have also sought bankruptcy protection in Delaware.
Hacker’s identity found
Nick Percoco, the Chief Security Officer of Kraken Exchange, tweeted two hours ago in response to Mario Nawfal, the Founder and CEO of IBCgroup.io, saying the Kraken team has finally determined the identity of the individual who hacked FTX.
According to the tweet by Mario Nawfal, the perpetrator of the hack is most likely an unskilled member of the organization. Throughout the course of the hack, Kraken was used to dump funds.
So how exactly were the funds stolen?
According to Nansen, a blockchain analytic organization, total outflows of $339 million dollars occurred over the course of the previous twenty-four hours from both the international exchange and its US equivalent.
After studying the transactions on the blockchain, it was discovered that the wallet address associated with FTX had received a total of $105.3 million worth of Ethereum, Solana, and BNB tokens from wallets situated in the United States and other countries on November 11.
Following Tether’s decision to ban their USDT, the FTX wallet made a trade on the decentralized market 1inch, exchanging 16 million USDT for DAI. After that, USDT, LINK, and sETH were all accepted by the address, and it then proceeded to sell USDT and sETH.
