Internet sleuths have discovered that under ‘suspicious circumstances’ $515 million has disappeared from the accounts of the collapsed crypto exchange FTX.
The company’s founder, Sam Bankman-Fried, resigned from FTX on Friday, as the crypto exchange filed for bankruptcy and reports emerged that, aside from the missing $515 million, up to $2 billion in client funds has been taken off its books in recent weeks. the company had disappeared.
Nick Percoco, chief security officer of Kraken, another exchange, said in a tweet: “We know the identity of the user” who withdrew the money from FTX.
Ryne Miller, FTX’s US general counsel, responded to that tweet, saying, “Interested in anything you want to share. Can you contact me?’
At the time of writing, Percoco has not elaborated on whether or not the withdrawal was the work of a hacker.
Multiple reports have pointed out that the methods used to withdraw the money bear the hallmarks of a hacker.
It is reported that Bankman-Fried, known for regularly wearing t-shirts and shorts, is holed up in the Bahamas as his empire continues to crumble.
DailyMail.com has reached out to Bankman-Fried for comment.
New FTX Chief Executive John J. Ray III, known for guiding Enron through bankruptcy in the 2000s, said Saturday that the company was working with law enforcement and regulators to mitigate the problem, doing “everything to keep all assets safe.” set, wherever. convenient.’
“We are in the process of removing the trading and withdrawal functionality, among other things,” he said.
FTX founder Sam Bankman-Fried is in the Bahamas after his resignation as CEO on Friday
After owner resignation, the company changed John J. Ray III, who is best known for guiding Enron through bankruptcy in the 2000s
FTX, the troubled cryptocurrency exchange, has filed for bankruptcy after a stunning financial implosion shook up concerns over the handling of client funds and the wider crypto markets
On Saturday, Ryne Miller said in a Twitter post that the company’s digital assets were being moved to so-called cold storage “to mitigate the damage from detecting unauthorized transactions.”
Cold storage refers to crypto wallets that are not connected to the internet to protect against hackers.
Miller previously tweeted that he was “examining anomalies with wallet movements linked to consolidation of FTX balances on exchanges.”
FTX enjoyed the support of major celebrities before a ‘liquidity crisis’ caused its downfall
Bankman-Fried has also been the subject of speculation about his whereabouts and he has denied on Twitter rumors that he had flown to Argentina.
He confirmed to the New York Times that he was in the Bahamas. In 2022, Bankman-Fried was one of the largest donors to the Democratic Party.
Bankman-Fried had transferred $10 billion in customer money to his trading company, Alameda Research.
The company is run by Bankman-Fried’s girlfriend, Caroline Ellison.
Much of that total has since disappeared, they said. A source estimated the missing amount at about $1.7 billion. The other said the difference was between $1 billion and $2 billion.
Blockchain analytics firm Nansen said it saw $659 million in outflows from FTX International and FTX US in the past 24 hours.
Bankman-Fried, once hailed as the ‘poster boy’ for crypto, faces bankruptcy after company collapse
A separate blockchain analytics firm Elliptic said about $515 million worth of cryptoassets had been “suspected stolen,” while $186 million was likely moved by FTX to secure storage.
The company described the move of the funds as “suspicious.”
Crypto exchange Kraken said: “We can confirm that our team is aware of the identity of the account linked to the pending FTX hack, and we are committed to working with law enforcement to ensure they get everything have what they need to sufficiently investigate this matter.”
In its bankruptcy filing, FTX Trading said it has $10 billion to $50 billion in assets, $10 billion to $50 billion in liabilities and more than 100,000 creditors.
Ray, a restructuring expert, was appointed to take over as CEO.
A document Bankman-Fried shared with investors Thursday showed that FTX had $13.86 billion in liabilities and $14.6 billion in assets, according to Reuters.
However, only $900 million of those assets were liquid, leading to the cash crisis that ended with the company’s bankruptcy.
In a tweet on Friday, Bankman-Fried said he was “stitching together” what happened at FTX.
“I was shocked to see things unfold as they did earlier this week,” he wrote. ‘Soon I will write a more complete article one by one.’
Bitcoin fell below $16,000 for the first time since 2020 after Binance abandoned its rescue deal for FTX on Wednesday.
A full breakdown of Bitcoin’s price shows the crypto’s volatile history
On Saturday, it was trading around $16,800, more than 75% lower than the all-time high of $69,000 it reached in November last year.
FTX’s token FTT fell about 91% this week. Shares of cryptocurrency and blockchain-related companies have also fallen.
“We believe that cryptocurrency markets remain too small and isolated to cause contagion in financial markets, with a market cap of $890 billion compared to $41 trillion in US equities,” Citi analysts wrote.
In four years, FTX has raised $1.8 billion from venture capital and pension funds. This is the main way financial markets can suffer, as it could have further minor implications for portfolio shocks in a volatile macro regime.”
The US securities regulator is investigating the way FTX.com handles client funds, as well as its crypto lending business, a source with knowledge of the investigation said.
Hedge fund Galois Capital had trapped half of its assets on FTX, the Financial Times reported Saturday, citing a letter from co-founder Kevin Zhou to investors and estimated the amount at about $100 million.