FTX Chief Announces $6 Million Compensation in Phishing Attack

After the recent phishing attack, the chief of FTX crypto exchange Sam Bankman-Fried has come out in the open extending help to the victims. However, SBF has a strong message to the users that they need to be more careful on their end and this is the last time the exchange will offer this compensation.

There has been a massive surge in crypto phishing attacks over the last few years. This basically occurs with a bad attachment to an email. However, with time, crypto phishing is getting sophisticated.

Basically, scammers are now impersonating the website and intercepting the username/password to get users’ login controls. This way, they can completely drain the user accounts. SBF said that the FTX security team has been working round-the-clock to prevent such kind of phishing. There have been security measures like the 2-factor-authentication (2FA) to protect users. Mr. Sam Bankman-Fried noted:

“We’ve mostly stamped out sites that try to phish users by masquerading as FTX. But we can’t fix fake sites impersonating *other* services. A few users accidentally registered at fake other sites, including 3 Commas.

They provided their FTX api keys to use the sites’ trading tools. Others users were probably phished through other methods. But one way or another, these users were exploited by third party attackers”.

Offering $6 Million Compensation

The FTX chief stated that users giving up their credentials on sites masquerading as FTX could be dangerous. This allows those fishy websites to control users’ FTX API keys. SBF said that currently, each crypto firm is trying to fight this out at individual levels. However, this issue needs to be addressed at an industry level.

Although FTX has decided to compensate the affected users this time, this is a one-off thing. SBF said:

We can’t compensate for users getting phished by fake versions of other companies in the space!

THIS IS A ONE-TIME THING AND WE WILL NOT DO THIS GOING FORWARD. THIS IS NOT A PRECEDENT. We will not making a habit of compensating for uses getting phished by fake versions of other companies!

Due to the recent phishing attack, FTX will be offering $6 million compensation to victims. If the perpetrators return 95% within 24 hours to FTX accounts, they will “absolve” the hackers of legal action.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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