FTX drop continues to hurt. The now-defunct cryptocurrency exchange faces unauthorized asset transactions that could result in the disappearance of hundreds of millions of dollars. The situation that forced the new manager of the group to communicate.
“FTX USA and FTX. com continues to strive to protect all assets, regardless of where they are located.”so, in a message sent on Saturday, November 12, he tried to reassure the new CEO John Ray, who is in charge of restructuring the group. By Ryne Miller on TwitterLegal officer of FTX. “Unauthorized access to certain assets has occurred” so John Ray confirmed.
It replaces the head of FTX, its founder, Sam Bankman-Fried, who recently resigned. Cryptocurrency exchanges, a heavily regulated sector, filed for Chapter 11 bankruptcy protection on the same day. The company valued its assets at between $10 billion and $50 billion (€9 billion to €48 billion) and listed more than 130 branches worldwide, according to the bankruptcy filing.
Assets placed in an offline wallet
While FTX officials did not provide details on the amount of transactions observed in the alleged illegal activity, cryptocurrency analysis firm Elliptic noted in an analysis published on Saturday that “Just 24 hours after filing for bankruptcy (…), FTX wallets were emptied of more than $663 million”. In details, “477 million dollars were allegedly stolen, and the rest was transferred to a safe deposit box by the FTX itself”Elliptic says.
“Among other things, we are in the process of decommissioning trading and withdrawal functionality and transferring as many digital assets as possible to the new cold wallet custodian” – The non-internet wallet was designed to store cryptocurrency without foreign capture – as the new head of FTX detailed in a statement published on Twitter. John Ray also clarified this“In response, an active investigation of the facts was immediately started (…). We have contacted and are coordinating with relevant law enforcement and regulators.”.
Ten days ago, FTX, still the second largest cryptocurrency platform in the world and valued at around $32 billion, experienced a lightning strike.
Friday marked a turning point after a hectic week. The group’s founder, 30-year-old Sam Bankman-Fried, who is credited with starting one of the most impressive successes in the cryptocurrency universe and is by now a multi-billionaire, has resigned, being replaced by John Ray in the process.
Then, overnight, FTX’s chief legal officer, Ryne Miller, tweeted “Investigation of anomalies with portfolio movements related to consolidation of FTX balances between exchanges”and noted “The facts are not clear just like other movements are not clear”. He announced this on Saturday morning “unauthorized transactions” was observed and is a platform “took precautions to move all digital assets to cold storage”. “The process has been accelerated [vendredi] in the evening – to reduce damage while observing unauthorized operations”noted.
Disappointment surfaced when news revealed that his Alameda Research fund had invested in cryptocurrencies issued by FTX. com in a risky financial arrangement that risks revealing major conflicts of interest. FTX’s failures were also highlighted by industry leader Binance, which announced on Sunday that it was selling a cryptocurrency linked to the FTX group and then offered to buy FTX. com on Tuesday before withdrawing on Wednesday.
The group is being investigated by the Securities and Exchange Commission and the New York Department of Justice New York Times Citing sources familiar with the investigation. And the fall from grace has extended to the NBA, with the Miami Heat announcing that its venue, FTX Arena, will be renamed.