FTX, a defunct cryptocurrency exchange, has reportedly hired a team of financial forensic investigators to locate missing customer cryptocurrency estimated to be worth billions of dollars, according to reports.
According to a Wall Street Journal article from December 7, Matt Jacques, a former chief accountant for the Securities and Exchange Commission, led the selection process for the financial advisory firm AlixPartners, which was chosen for the position (SEC).
The forensics company will apparently be tasked with carrying out “asset tracing” to locate and recover the missing digital assets as part of the streamlining work being done by FTX.
Hackers looted over $450 million worth of assets from FTX
On November 11, hackers stole assets worth over $450 million from wallets owned by FTX and FTX.US.
Former CEO Sam Bankman-Fried stated that he had “narrowed it down to eight people” and was close to identifying the hacker, who was “either an ex-employee or somewhere someone embedded malware on an ex-computer,” in an interview with cryptocurrency blogger Tiffany Fong on Nov. 16. employee’s
On November 22, a lawyer for FTX’s creditors alleged that “a huge portion of assets have either been stolen or are missing” from FTX. It was revealed at the time that Chainalysis and other blockchain analytics firms had been retained to help with the case.
Since then, the FTX funds have been stolen and are currently being laundered through a number of cryptocurrency exchanges and mixers.
The hacker transferred their Ether (ETH) holdings to a new wallet address on November 20, converted some of the ETH into an ERC-20 variant of Bitcoin, and then linked the funds to the BTC Network. On Nov. 29, they sent the Bitcoin through the OKX exchange and a crypto mixer using a technique called peel chaining to launder the funds. This method divides the holdings into progressively smaller amounts across various wallets.
The hacker attempted peel chaining once more on November 21 by dividing 180,000 ETH among 12 newly created wallets.
An additional claim made in the past by Sam Bankman-Fried, a former CEO, claimed that customer deposits at Sam’s exchange and its sister trading company Alameda Research were “unknowingly commingled” with customer funds at FTX that were loaned to Alameda.
In his initial bankruptcy filing, the new CEO and chief restructuring officer, John Ray III, was harsh, claiming that in his 40-year career, he had “never” seen “such a complete failure of corporate controls.”