FTX assets vanish over bankruptcy turmoil

In the wake of FTX and FTX US insolvency woes, more funds seem to have vanished mysteriously from FTX’s wallets. As the company pushes for reorganization, and with a new boss in place, FTX’s wallets are left scavenging what digital assets are left amid efforts and hopes to revive the already slain crypto firm.

Potential hack and massive outflows

According to data from FTX’s wallet (https://etherscan.io/address/0x59a638eab1856d22e153d700342e27a9e4d10286) token holdings, the crypto company claims that a hack that happened late Friday has resulted to loss of funds. FTX’s wallet now holds about 19,500 ETH, 34,000 stETH. 33.8 million DAI, etc, or roughly $276 million.

The crypto company’s team confirmed the rumors of the hack on FTX’s official Telegram account, and instructed users to delete FTX apps and avoid its website.

 FTX General Counsel, Ryne Miller, pinned this message written by an account administrator in the FTX Support Telegram chat, “FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don’t go on FTX site as it might download Trojans.”

Data from on-chain several Ethereum tokens together with Solana and Binance Smart Chain tokens have left the company’s wallets and moved to decentralized exchanges like 1inch.

Miller confirmed that FTX was already on the matter and that they would communicate the issue later. 

He said:

“Investigating abnormalities with wallet movements related to consolidation of FTX balances across exchanges – unclear facts as other movements not clear. Will share more info as soon as we have it.”

Several FTX wallet users claim that they have noticed $0 balances in their FTX and FTX US wallets. One reasonable cause to this could be because FTX’s API appears to be down.

Around yesterday night, users could not access their accounts because FTX’s login portal was unavailable; however, the site is still online. Users only got a 503 error when they attempted to log in, which only happens when the server is unavailable, or because it’s down for maintenance or unavailable for access.

Right after funds went missing cryptically, Miller confirmed that the company initiated precautionary steps and moved all crypto to cold storage.

He wrote a tweet saying,”Following the Chapter 11 bankruptcy filings – FTX US and FTX.com initiated precautionary steps to move all digital assets to cold storage. Process was expedited this evening – to mitigate damage upon observing unauthorized transactions.”

FTX has a new CEO

Nonetheless, FTX could have a sigh of relief now after including the guy who dealt with the Enron mess and recovered $20 billion for creditors, to deal with the biggest insolvency of 2022 in the United States.

Furthermore, this comes after Sam Bankman-Fried resigned from the company, and now the ‘Enron mess guy’, John J. Ray III takes over as CEO making him the liquidator of the FTX maze.

Ray said in a statement,:

“I’m piecing together all of the details, but I was shocked to see things unravel the way they did earlier this week. I will, soon, write up a more complete post on the play by play, but I want to make sure that I get it right when I do.”

He also added:

“The FTX Group has valuable assets that can only be effectively administered in an organized, joint process. I want to assure every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholder that we are going to conduct this effort with diligence, thoroughness and transparency.”