Federal prosecutors are investigating an alleged cybercrime that allegedly took more than $370 million from the cryptocurrency exchange FTX within hours of its bankruptcy filing last month.
FTX Scandal
A person with knowledge of the situation claims that the US Department of Justice (DoJ) has opened a criminal investigation into the stolen funds that are independent of the fraud case against FTX co-founder Sam Bankman-Fried.
The individual verified that US officials were successful in freezing some of the stolen money. However, the overall look is far less than the frozen assets.
The invasion may have been an inside operation, as Bankman-Fried claimed in interviews before his arrest, or it may have been the work of a shady hacker looking to take advantage of a failing business’s weaknesses.
These behaviors may constitute computer fraud, a felony punishable by a maximum of ten years in jail.
Read more: EX-FTX CEO Sam Bankman-Fried arrested in Bahamas, extradition awaits to US
Company Declared Bankruptcy Same Day Of Theft Incident
John J. Ray III, the new CEO of FTX, disclosed on November 12 that there had been unauthorized access to FTX assets on November 11, the same day the company filed for bankruptcy.
According to documents filed by the federal government, the alleged hacker stole assets worth $372 million.
Elliptic, a blockchain analytics company, later discovered that the stolen FTX tokens were exchanged on decentralized exchanges for Ethereum, another cryptocurrency, in a method typically observed in massive hacks.
Then, on November 20, Chainalysis, another cryptocurrency analytics outfit, tweeted that the stolen money had been converted from Ethereum to Bitcoin and was on the move.
The association cautioned cryptocurrency exchanges at the time to remain vigilant in case a hacker attempted to withdraw payments.
According to ZachXBT, a Twitter user who monitors crypto breaches, other monies were transferred into a mixer, which jumbles together various forms of cryptocurrency to conceal their origins.
On Monday, it was reported that the cryptocurrency exchange Paxos had recovered 11,184 Paxos Gold tokens, worth around $20 million, from the stolen assets. In Paxos’ stance, these assets are believed to be backed by genuine gold.
Read more: Former FTX founder Sam Bankman-Fried is willing to discuss the company’s collapse in Congress
