Cryptocurrency exchange FTX said on Saturday it was moving funds to offline storage after reporting “unauthorized transactions”.

Analysts said that millions of dollars of assets have been withdrawn from the platform.

“Following Chapter 11 Bankruptcy Filing – FTX US and FTX [dot] com has initiated precautionary measures to move all digital assets into cold storage. The process was expedited tonight to mitigate damages from observing unauthorized transactions,” tweeted Ryne Miller, general counsel of FTX in the United States.

Cold storage refers to crypto wallets that are not connected to the internet to protect against hackers.

INSIDE THE CRYPTO EXCHANGE FTX COLLAPSE: EVERYTHING YOU NEED TO KNOW

Miller had previously written that FTX was “investigating anomalies with portfolio movements related to the consolidation of FTX balances across exchanges,” while noting that the facts were unclear “as other movements [were] not clear.”

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An admin in the official FTX Telegram channel wrote that “Ftx has been hacked.”

That administrator told users not to visit the FTX site “as it may download trojans”.

“Some funds have been recovered,” the FTX administrator wrote.

FTP extension

This illustrative photo shows a smartphone screen displaying the logo of FTX, the cryptocurrency exchange platform, with a screen displaying the FTX website in the background in Arlington, Virginia on February 10, 2022.

Coindesk reports that the message was pinned by Miller.

FTX did not immediately respond to a request from FOX Business for comment on the matter.

Data from Singapore-based analyst firm Nansen showed a daily net outflow from FTX of about $266 million, with $73 million taken from FTX US

Sam Bankman-Fried,

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, August 17, 2022.

Reuters, citing two people familiar with the matter, reported that at least $1 billion in client funds had disappeared and that People told the news that Bankman-Fried had secretly moved $10 billion in client funds from FTX to FTX. his trading company Alameda Research.

Two sources told Reuters that Bankman-Fried – in a meeting he confirmed – shared documents with other top executives that revealed the financial hole.

The spreadsheets reportedly showed that between $1 and $2 billion of funds were not accounted for in Alameda’s assets and that the spreadsheets did not indicate where the money was moved.

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In text messages to Reuters, Bankman-Fried said he “disagreeed with the characterization” of the $10 billion transfer.

“We didn’t move secretly,” she said. “We had confusing internal labeling and misinterpreted it.”

When asked about the missing funds, Bankman-Fried replied, “???”

FTP extension

In this photo illustration, the FTX website is seen on a computer on November 10, 2022 in Atlanta.

Upon further investigation, FTX’s legal and finance teams allegedly learned that Bankman-Fried implemented what two people described as a “backdoor” into FTX’s accounting system, allowing him to execute commands to alter the company’s financial records. company without notifying others.

Bankman-Fried denied implementing a “backdoor”.

FOX Business’s request for further comment from Bankman-Fried was not immediately returned.

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This all comes after the Bahamas-based FTX filed for Chapter 11 bankruptcy protection.

A bailout deal with rival exchange Binance has collapsed.

Reuters said the U.S. Securities and Exchange Commission and the Department of Justice are investigating FTX.com’s handling of customer funds, as well as its cryptocurrency lending activities.

Reuters contributed to this report.

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