FTX Has Been Hacked; Exchange Faces Unauthorized Outflow Of $660M

Nov. 12, 2022
FTX Has Been Hacked; Exchange Faces Unauthorized Outflow Of $660M

The collapse of  Sam Bankman-Fried’s FTX is already one of the most spectacular disasters in financial history. It got even worse as the bankrupt allegedly suffered a series of unauthorized transactions over the weekend. About $660 million was drained from the cryptocurrency exchange. This was the same day that the exchange filed for Chapter 11 bankruptcy. It has led to many warnings from users and analysts about not interacting with its website or mobile app.

Official exchange Support Telegram chat administrator wrote:

“FTX has been hacked.  FTX apps are malware. Delete them. Chat is open. Don’t go on FTX site as it might download Trojans”.

Hours later, Miller disclosed on Twitter that FTX US and FTX.com were moving all of their digital assets into cold storage due to Friday’s bankruptcy filing. He said the process was sped up this evening to minimize the impact of unauthorized transactions being scrutinized.

Many exchange wallet holders have complained that there are no balances in their wallets.

According to pseudonymous blockchain sleuth ZachXBT, the outflow shown on the blockchain tracker Etherscan was about $650 million. Another analysis from Elliptic says that early indications are that about $475 million was stolen from illegal transactions where Stablecoin and other tokens were quickly converted to ether.

Analyst firm Nansen tweeted that $266M was withdrawn from FTX in the last 24 hours. It is reported that FTX US, which operates in the United States, lost $73.4 million. Nansen data reporter Martin Lee said that the size of the alleged attack increased overnight, with net outflows totalling $659 million from FTX and FTX US. This accounted for about a third of all wallet outflows over the previous seven days.

Chief executive officer at Nansen, Alex Svanevik, tweeted:

“It’s unclear exactly who’s making the transactions, but you wouldn’t expect to see these on-chain trades at this time.”

Moreover, login was unavailable at midnight EST, and users received a 503 error when logging in. A 503 error shows server is unavailable, usually because it is inaccessible or down for maintenance.

FTX reigned as a top three cryptocurrency exchange earlier this week. Its collapse came on Nov. 7 when Binance CEO Changpeng Zhao tweeted that his exchange would liquidate all FTX Token (FTT) positions. The announcement triggered a bank run, from which there was no recovery.

Related Reading | A Chinese Court Approves NFTs As Legal Virtual Property

Syed Ali Haider

Researcher & Editor
Ali Haider is a Blockchain enthusiast and writer passionate about enhancing the acceptance, adoption, and integration of Blockchain technology worldwide. He has also advocated for digital freedom and cybersecurity for many years.