FTX Crisis Deepens As Beleaguered Exchange Faces Potential Hack

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The FTX crisis is showing no signs of abating, with the exchange now facing the spectre of a potential hack. 

Officials at FTX appeared to confirm the hack on Telegram and urged users to delete all apps associated with FTX and avoid the website entirely. 

Mysterious Outflows Point To Potential Hack 

FTX wallets saw a flurry of activity late on Friday, as more than $600 million left the exchange’s wallets, with no clarity around who was behind the transactions or why. The wallet address to which the funds are being transferred to revealed that it had received funds from a host of international and U.S.-based wallets linked to FTX. The wallet amassed over 83,878.63 ETH in just over two hours starting from 9.20 PM ET. 

FTX officials soon revealed on its official Telegram channel that the exchange had been hacked, urging users to delete any FTX apps on their devices and not to install any updates. Additionally, they also urged users to avoid the FTX website. 

“FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don’t go on the FTX site as it might download Trojans.”

Speculations About Activities As Rumors Swirl

Blockchain investigators were quick to speculate on the transfers and raise questions about the company’s intent. Some investigators saw the transfer as the beginning of the bankruptcy process before rumors of an external hack emerged. Users pointed to the fact that some of the transactions included derogatory notes and messages directed at FTX founder Sam Bankman-Fried.

Other users suggested that the transfer of funds was being coordinated by someone who was part of the FTX founder’s inner circle. However, Twitter and crypto sleuth ZachXBT tweeted that multiple former FTX employees confirmed that they do not recognize any of the ongoing transfers. On-chain data sources showed that Ethereum, Solana, and Binance Smart Chain tokens had been moved from FTX’s official wallets to decentralized exchanges such as 1Inch. 

FTX General Counsel Ryne Miller stated that FTX was investigating abnormal wallet fund movements related to FTX across exchanges. 

“Investigating abnormalities with wallet movements related to the consolidation of FTX balances across exchanges – unclear facts as other movements not clear. Will share more info as soon as we have it.”

FTX Remains Silent

Curiously, the transfers have yet to be officially addressed by the FTX leadership and come on the same day the exchange filed for Chapter 11 Bankruptcy Protection after losing billions in user funds. FTX wallet holders also reported seeing their balances down to $0 in their FTX and FTX US wallets. By midnight, the FTX login portal went down, giving users a “503 error” each time they attempted to log in. The site, however, remains online. 

“Multiple people are saying that their FTX balances now read $0 as soon as this attack began. Previously it showed their balance but was just not withdrawable.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

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