FTX Hit by Nine-Figure Hack as Meltdown Continues

FTX.US General Counsel Ryne Miller said that assets had been moved to cold storage “to mitigate damage upon observing unauthorized transactions.” 

FTX Suffers Major Hack 

FTX, the collapsed cryptocurrency exchange that’s been at the center of a rapidly developing drama this week, has been hacked. 

Hours after the embattled firm announced it was filing for Chapter 11 bankruptcy, a number of on-chain sleuths took to Twitter to point out a series of suspicious outflows from the exchange to external wallets. Though the full scale of the damage is still unknown, over $400 million was moved to addresses on Ethereum, Solana, BNB Chain, and other crypto networks. “FTX has been hacked. All funds seem to be gone,” an admin going by Rey wrote on the exchange’s official Telegram channel. According to the admin, FTX’s app was also affected. “FTX apps are malware. Delete them,” they wrote. 

FTX.US General Counsel Ryne Miller addressed the incident on Twitter early Saturday, saying that some of the company’s remaining employees were “investigating abnormalities with wallet movements.” He later followed up by saying that team members had moved assets on FTX and FTX.US to cold storage “to mitigate damage upon observing unauthorized transactions.” 

Following the Chapter 11 bankruptcy filings – FTX US and FTX [dot] com initiated precautionary steps to move all digital assets to cold storage. Process was expedited this evening – to mitigate damage upon observing unauthorized transactions.

— Ryne Miller (@_Ryne_Miller) November 12, 2022

Due to the nature of the hack, which saw the attackers gain access to the exchange to drain hundreds of millions of dollars across multiple networks, some have speculated that the incident may have been an inside job. “Multiple former FTX employees confirmed to me they do not recognize these transfers,” on-chain detective ZachXBT tweeted. 

Shortly after the hack, Tether froze $31.4 million worth of USDT transferred in the incident. Elon Musk also weighed in, noting that the hack was “being tracked in real-time on Twitter.”

The hack news comes after a week of chaos in the crypto market brought on by FTX’s collapse. This week, it emerged that the exchange was insolvent after former CEO Sam Bankman-Fried used billions of dollars worth of customer funds to bail out his trading firm, Alamada Research. The firm filed for bankruptcy Friday while Bankman-Fried stepped down. Alameda is also winding down. The FTX situation is still developing at a fast pace, and U.S. agencies like the Department of Justice and Securities and Exchange Commission are investigating the events. 

This story is developing and will be updated as further details emerge. 

Disclosure: At the time of writing, the author of this piece owned ETH, USDT, and several other crypto assets.