Hackers could steal all the cryptocurrency belonging to the bankrupt FTX cryptocurrency exchange

A new report from Wired journalists claims that the «weak security mechanisms» and non-transparent nature of the FTX cryptocurrency exchange’s business could have led to even more damage than has already been done. Potentially, the losses are estimated at billions of dollars.

According to media reports, the site’s executives tried to move various assets worth more than $ 1 billion to physical crypto wallets, as digital funds on the exchange regularly disappeared. In the end, they managed to keep most of the users' cryptocurrencies. However, this means that almost the entire total balance of the exchange was at risk.

Accounts linked to FTX and FTX. US were «emptied» on November 11, 2022. This happened just a few hours after the company declared bankruptcy. Its founder Сем Бенкман-Фрід" href="https://noworries.news/biography/sem-benkman-frid/" data-bio-id="3697">Sam Bankman-Fried announced that he was stepping down as CEO. The chief restructuring officer of FTX Debtors, John J. Ray III, later said that $ 323 million in various tokens had been stolen from the global platform’s accounts. Another $ 90 million disappeared from the vaults of the American branch of the crypto exchange.

According to the report, most of FTX’s funds were kept on hot wallets. The attackers probably gained access to the private keys and started withdrawing digital funds. According to Wired, after the bankruptcy, few team members knew about the exact number of wallets belonging to the platform or the location of private keys.

The exchange’s team watched the accounts empty before FTX co-founder Gary Wang gained access to the wallets and began moving the cryptocurrencies to a safe place. He transferred about $ 500 million to Kumanan Ramanathan, an FTX advisor from the law firm Alvarez & Marsall. After the transaction to this address, «FTX's fund drain stopped.» The next day, Wang and Benkman-Fried made several tranches of $ 500 million to wallets provided by BitGo. This helped the company keep more than $ 1 billion.