On Tuesday, FTX, a crypto firm that has become bankrupt, reported that hackers had stolen crypto valued at $415 million from the exchange’s accounts, which comprises a substantial part of the declared assets the company will be trying to recuperate.
FTX’s legal team and advisors released a statement called “Maximizing FTX Recoveries,” revealing the approximate worth of liquid assets they identified in recovery to be 5.5 billion dollars.
This total includes $323 million in unapproved transfers from the international FTX.com and $90 million from FTX US. Additionally, $2 million in cryptocurrency owned by Alameda Research’s hedge fund was taken.
This may be related to the hack that was uncovered when the company declared insolvency in November.
Eventually, the value of the digital currency taken was supposedly around $477 million, as per blockchain analytics company Elliptic. The removal of vast funds from the trade and related hedge fund, called Alameda, caused FTX to declare bankruptcy.
Its founder and former CEO Bankman-Fried was charged with deception and money laundering in December and since then has denied the allegations, being released on a quarter million dollar bond in preparation for his hearing due to take place this October.
FTX’s advisers are currently looking into the $2 billion payment from FTX to crypto exchange Binance in the last quarter of 2021. This happened after Bankman-Fried had purchased Binance’s stake in the firm during 2021, Binance having been FTX’s first external investor.
In December, CZ Zhao from Binance was enquired about the possibility of needing to return the $2 billion during FTX’s bankruptcy proceedings.
He replied that their legal team was qualified to handle it. The presentation from the FTX lawyers and advisors has a failure of their assets, including several millions of dollars’ worth of land in the Bahamas.
John Ray, acting Chief Executive Office at FTX throughout the restructuring, said they are making good progress in their efforts to get back as much money as possible and that it took a tremendous effort from their team to obtain the initial info.
Even after splitting up liquid and non-liquid tokens, the presentation still contained FTT tokens from FTX valued at $529 million. Unfortunately, this token has plummeted in value by more than 90% since the start of November.
According to researchers, an FTX-operated service has been employed to wash hundreds of millions of dollars that were illicitly obtained from FTX.
Cyber criminals who took approximately $477 million worth of crypto from the defunct exchange FTX have started to funnel the stolen funds into bitcoin.
In June, after FTX declared for bankruptcy, the new CEO John Ray III reported that “unapproved access to some resources had taken place.”
Elliptic, a blockchain analytics business, evaluates that about $477 million worth of cryptocurrency was taken from FTX.
The burglary is a further setback to FTX, a $32 billion crypto enterprise whose collapse has caused a stir in the sector.
The criminals’ proceeds have been directed into various digital coins, but the majority of it — more than $280 million — was exchanged into the cryptocurrency ether, according to the public blockchain records of the account connected to the hackers.
Tom Robinson, one of the founders of Elliptic, told CNBC that the people behind the hack had changed the ether into a crypto product named RenBTC and then to bitcoin with the help of a bridge. This bridge allowed for the transformation of one crypto to another without having to go through a third party exchange.
Robinson mentioned that this is a common method for cleaning up stolen crypto. According to Elliptic, this bridge has been used to clean up hundreds of millions of dollars in digital currency thought to be from ransomware or hacks with a Russian component.
Using RenBridge, approximately $74 million worth of RenBTC has been shifted to bitcoin.
Alameda, a trading firm associated with FTX, purchased RenBridge in 2021 as part of FTX’s larger push to construct Solana and Serum.
Serum is a decentralized exchange with an exclusive token that works on Solana, which is expected to bring faster settlement and execution to users. FTX and Alameda were the main supporters of this project, which was forked to keep FTX from taking control after its bankruptcy.
On November 11th, FTX clients noticed peculiar transfers of cryptocurrency, which caused worries that FTX’s platform was hacked. People in FTX’s Telegram chatroom believed that the app and platform were in fact infiltrated and breached.
In addition, Bankman-Fried was implicated for supposedly teaming up with the regulators in the Bahamas to shift crypto out of FTX wallets after he gave an interview to Vox. He later declared that he had only had an informal chat with a reporter friend, and blamed the supposed theft of FTX crypto on an ex-employee.
According to FTX’s documents, they identified the transfers to the Bahamas while investigating the crypto theft. However, the papers did not answer whether the two incidents were related or just coincidental. The value of the resources that the Bahamian overseers have seized is yet to be revealed. In an emergency court filing by FTX on Nov. 18, they accused Bankman-Fried of possibly colluding with the authorities.
Robinson stated that it would be tough for the hackers to convert the money into fiat due to the trackability of crypto. He predicts the criminals will use mixers to conceal their blockchain pathway. Mixers are either programs or services that make it hard to trace crypto transactions on the blockchain.
It’s possible that the cause of transferring these possessions to Bitcoin is the higher accessibility of mixing services,” he carried on.
The blockchain is a public record of crypto transactions. Each token may have its own blockchain. This causes it to be doable to track to a certain degree where the funds are moving. Utilizing mixers could make this hard to do.
Chainalysis, a crypto compliance software company, also declared in a tweet on Sunday that the hackers are in the process of transferring the funds.
On Sunday, FTX urged crypto exchanges to be vigilant for the stolen funds if the thieves try to pass the money through one of their services.
“Exchanges should take all measures necessary to ensure that these resources are returned to the bankruptcy estate,” FTX stated in another tweet.
FTX owes its top creditors around $3.1 billion, according to court documents. To put it another way, the stolen money is nearly 15% of what FTX owes its most significant customers alone.
Bankman-Fried had once been in control of a substantial cryptocurrency business that owned billions of dollars’ worth of possessions and operated on every continent. The failure of FTX has resulted in Bankman-Fried becoming destitute and the shareholders unable to access the digital currencies they owned.