FTX Collapse Worsens After a $600 Million Hack And Criminal Charges

Cyber Attacks
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Bankrupt cryptocurrency exchange FTX confirmed an authorized hack that potentially drained about $600 million out of the exchange's wallets.

Key Takeaways

  • Bankrupt FTX remains troubled after hackers siphoned $600 million from the exchange. 
  • The new CEO and chief restructuring officer of the beleaguered cryptocurrency exchange, John Jay Ray III, pauses crypto withdrawal to mitigate the effect of the hack. 
  • The Security and Exchange Commission (SEC) places Sam Bankman-Fried under scrutiny. The crypto exchange is facing criminal charges in the Bahamas.

Binance Comes For Rescue

The attack took place in the late hours of Friday night after FTX's bankruptcy filing.

"FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don't go on FTX site as it might download Trojans," wrote an account administrator in the FTX Support Telegram group.

Hours later, FTX General Counsel Ryne Miller tweeted that the crypto exchange was making ''every effort to secure all assets, wherever located.''

To help FTX's projects from a liquidity crisis, Binance CEO Changpeng Zhao announced on Monday an “Industry recovery fund” to reduce the “cascading negative effects of FTX” that helps projects with a solid foundation and structure but experiencing a liquidity crisis to outlive. The fund details should come soon, said the CEO.

FTX Under Security Scrutiny

The FTX woes don't end here as the Security and Exchange Commission (SEC), alongside Commodity Futures Trading Commission (CFTC), is currently probing the integrity of the FTX exchange on whether it mismanaged users' funds and what's the relationship between FTX.com and FTX.US, according to a report by Bloomberg. In addition, the Department of Justice (DOJ) has placed the entity under scrutiny and is investigating the issue of possible fraud.

Furthermore, in the Bahamas, where Sam Bankman-Fried's FTX is headquartered, police and the securities regulator are investigating the possibility of criminal activity.

Crypto Chaos Continues

Twitter isn't silent, and has been a go-to source for real-time updates on the chaotic FTX saga even the CEO of Twitter, Elon Musk, noted this, saying, “FTX meltdown/ransack being tracked in real-time on Twitter.”

#FTX was used over the weekend to vent anger and dissatisfaction with the exchange. Prominent personalities like Mark Cuban expressed their dismay. In a Twitter poll by internet Mogul, Kim Dotcom questioned whether former billionaire founder Sam Bankman-Fried would—spend 1000 years behind bars or be let go for being a Biden donor—86% of 67,312 people voted for the latter.

The Bottom Line

The ongoing FTX chaos has fed the entire crypto market into unrest. FTX’s native token, FTT, plunged 93.3% in the past week from $22 to $1.49 per data from CoinGecko. Bitcoin declined to the 15k range, its all-time low for the year. 

Article Sources
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  2. Twitter. ''@_Ryne_Miller. 1:17 PM · Nov 12, 2022''

  3. Twitter. “@cz_binance 2:39 AM . Nov. 14, 2022.” 

  4. Bloomberg.com. “FTX’s Sam Bankman-Fried Faces SEC Probe as His Empire Crumbles.”

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  8. Twitter. ''@KimDotcom.2:19 AM · Nov 13, 2022''

  9. CoinGecko.com. “Cryptocurrencies FTX Price.”

  10. CoinGecko. ''Bitcoin Price.''

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