News
Nov 14, 2022
As the crypto world mourns the untimely demise of crypto exchange FTX, a hacker targets the stricken exchange. FTX was apparently hacked, with more than $600 million stolen from the exchange's crypto wallets. While the FTX topic was being discussed, FTX account holders began complaining that their assets had vanished from their wallets, generating speculations of a possible breach.
Before diving into this piece, you may want to catch up on some relevant stories, like how Binance published wallet address information for full disclosure and how, after the FTX Crash, the Tether Stablecoin (USDT) abandoned its dollar peg.
The operator of the FTX exchange's Telegram channel subsequently acknowledged the attack, alerting users that the FTX applications are malware. Remove them. Don't visit the FTX website since it may contain Trojans. More than $663 million in Ethereum, Binance Smart Chain, and Avalanche tokens have been removed from FTX's wallets.
The remaining funds are considered to have been transported to safe cold storage by FTX, and $477 million is suspected to have been robbed. Over $220 million in tokens have been exchanged for ETH or DAI through decentralized exchanges.
It looks like FTX moved $186 million across over a hundred different tokens into this wallet, which is still active. FTX US general counsel Ryne Miller agrees that the transfers were undertaken to protect the cash remaining in FTX's wallets. He verified that the procedure was accelerated to limit harm when fraudulent transactions were discovered.
Data from the blockchain indicated that many FTX wallets were sending payments to a single Ethereum wallet address. This wallet received cash from multiple foreign and US-based FTX wallets, amassing over 83,878.63 ETH, or about $105.3 million, in only two hours beginning at 9:20 p.m. ET on November 11, and has continued to experience a flood of funds.
The wallet owner transferred $26 million worth of Tether (USDT) to DAI using 1INClH while also allowing USDP for exchange on the CoW Protocol. As the situation progressed, the wallet permitted transfers and sales of other cryptocurrencies such as Chainlink, cUSDT, and stETH.
When FTX acknowledged the attack on Telegram, Tether banned $31.4 million in Tether USDT tokens associated with the transactions. According to crypto fraud investigator ZachXBT, the banned USDT tokens included $27.5 million in USDT on Solana and $3.9 million in USDT on Avalanche.
By blacklisting the stolen USDT token, Tether prevented hackers from moving the cash to another account or swapping it for other cryptocurrencies.
Ryne Miller subsequently tweeted a statement from John Ray, FTX's new Chief Restructuring Officer and CEO, in which he said that the team has been in touch with and is collaborating with law authorities and key regulators on the breach situation.
Ray claimed that they are in the process of eliminating trading and withdrawal capabilities as well as transferring as many digital assets as can be recognized to a new cold wallet custodian.
Kraken's Chief Security Officer, Nick Percoco, then sparked Crypto Twitter with a quick tweet claiming that Kraken had identified the culprit. Ryan Miller then requested that Percoco contact him about the problem.
According to a Kraken representative, the team is aware of the identities of the accounts implicated in the current FTX breach, and they are dedicated to assisting with law enforcement to ensure they have all they need to properly investigate this situation.
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