Late on Friday, more than $600 million in cryptocurrency vanished from the wallets of the defunct cryptocurrency corporation FTX, with no obvious reason given. Soon after, the exchange announced that it had been hacked in its official Telegram channel and advised users not to install any new updates and to delete all apps related to the exchange.
An account administrator in the firm’s Support Telegram chat wrote,
“FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don’t go on FTX site as it might download Trojans,”
Ryne Miller, general counsel for the exchange, confirmed the message.
Various Ethereum tokens, as well as the Solana and Binance Smart Chain tokens, have left the exchange’s official wallets and transferred to decentralized exchanges like 1inch, according to on-chain statistics. It appears that both the exchange and its US venture are impacted.
Hack and FTX Filing For Bankruptcy Interlinked?
The transfers occur on the same day that the exchange formally filed for Chapter 11 bankruptcy protection after losing allegedly billions of dollars in user payments. The transfers have not been officially acknowledged by the firm’s leadership.
Numerous owners of the exchange’s wallets have also reported seeing $0 balances in their firm’s website and the firm’s US wallets. This can be due to the FTX API being unavailable.
FTX founder Sam Bankman-Fried was the target of filthy jokes and insults that were apparently included in some of the transactions. This led to quick speculation on Twitter from members of the cryptocurrency community that the funds had been syphoned off as part of some sort of attack.
Some others hypothesized that someone in Bankman-inner Fried’s circle was behind the outflows, citing the simultaneous and sophisticated hacks of the exchange and its US branch as evidence of a possible inside job. ” Multiple former FTX employees confirmed to me that they do not recognize these transfers,” Twitter sleuth ZachXBT wrote in a tweet on Friday night.
With names like “cumsock.eth” and “downsyndromemonkey.eth,” many of the transactions seemed to be trolls when the wallet address became known, seeking to have their vanity names permanently inscribed in a ledger that would likely be submitted as a court document and read aloud by a judge.
By midnight Eastern Time, FTX’s login interface was down (the website is still up), and anyone who attempted to log in received a 503 error. A 503 error occurs when the server is down, usually because it is being serviced or is not accessible.