The Wall Street Journal: FTX is investigating a potential hack amid bankruptcy filing

by | Nov 13, 2022 | Stock Market

Bankrupt cryptocurrency exchange FTX is probing a potential hack and asked customers to stay off the FTX website, the company said. More than $370 million worth of crypto funds appears to be missing, according to crypto analytics firm Elliptic Enterprises Ltd. A rival crypto exchange said Saturday it knew the identity of the alleged hacker and would help authorities in their investigation.

The potential hack occurred Friday after FTX filed for bankruptcy. Ryne Miller, FTX US’s general counsel, said in a Saturday tweet that FTX and FTX US had started moving all digital assets to cold storage—crypto wallets that aren’t connected to the internet—after the bankruptcy filing. FTX is “investigating abnormalities with wallet movements related to the consolidation of FTX balances across exchanges,” Mr. Miller said on Twitter. He called the movements unauthorized transactions and said the facts are still unclear. FTX will “share more info as soon as we have it,” he said. A post in the exchange’s official Telegram channel called the fund flows a hack. “An active fact review and mitigation exercise was initiated immediately in response,” said John Ray, chief restructuring officer and chief executive of FTX. “We have been in contact with, and are coordinating with law enforcement and relevant regulators.” Approximately $371 million in crypto assets appeared to be taken from FTX without permission, according to Tom Robinson, co-founder of Elliptic. More than $220 million of the tokens were quickly converted to the stablecoin dai or ether, the second-largest cryptocurrency, on so-called decentralized exchanges. An expanded version of this story appears on WSJ.com. Al …

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