Collapsed crypto exchange FTX hit by rogue transactions

Collapsed crypto exchange FTX hit by rogue transactions

Promise Eze

Crypto exchange FTX was engulfed in further chaos on Saturday when the company said it had detected unauthorized transactions and analysts flagged that millions of dollars of assets had been moved from the platform in “suspicious circumstances”.

FTX filed for bankruptcy days after world’s largest crypto exchange, Binance, pulled out of an acquisition deal with the company, citing probe by US authorities and alleged misuse of customers funds as reason for not acquiring Bankman-Fried’s company.

The financial crisis in FTX came as a shock, as the company had bailed out crypto lender, BlockFi, with a $250 million loan in June.

Also, the struggling crypto broker, Voyager Digital, had received almost $500 million loan from Futures Exchange a week before FTX bailout BlockFi.

The exchange took the bankruptcy path in order to begin an orderly process to review and monetise assets for the benefit of all global stakeholders.

FTX’s dramatic fall from grace has seen 30-year-old Bankman-Fried, known for his shorts and t-shirt attire, morph from being poster child of crypto’s successes to the protagonist of the industry’s highest-profile crash.

The collapse shocked investors and prompted fresh calls to regulate the crypto asset sector, which has seen losses stack up so far this year as cryptocurrency prices collapsed.

At least $1 billion of customer funds have vanished from the platform, sources told Reuters on Friday. The firm’s founder Sam Bankman-Fried had transferred $10 billion of customer funds to his trading company, Alameda Research, the sources said.

New problems emerged on Saturday when FTX’s U.S. general counsel Ryne Miller said in a tweet that the firm’s digital assets were being moved into so-called cold storage “to mitigate damage upon observing unauthorized transactions.”

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


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