FTX Warns Other Exchanges

Embattled cryptocurrency exchange FTX said that unauthorized fund transfers from FTX Global were sent to other exchanges via crypto wallets. In the statement made on the official Twitter account of the company, the following statements were included:

“Exchanges should be aware that certain funds transferred from FTX Global and related debtors without authorization on 11/11/22 are being transferred to them through intermediate wallets.”

Blockchain research firm Chainalyasis said funds stolen from the company were on the move and warned exchanges to be on the alert if a hacker tried to cash out. No explanation was made about which exchanges the stolen funds were sent to or the amount of these funds.

This development comes after news that a person who allegedly hacked FTX earlier on Sunday converted more than $300 million in Ethereum into Bitcoin after holding it for a while. The identity of the person who dumped the FTX is unknown. While many say a hacker was able to drain funds from the embattled exchange that has filed for Chapter 11 bankruptcy protection, others think the dubious outflow may be an insider attempt.

Ray, a lawyer who also managed the bankruptcy of energy giant Enron, was called in to lead the restructuring of FTX. The exchange filed for bankruptcy on November 11. “I have never seen in my career as much as here a complete failure in corporate controls and a complete lack of reliable financial information,” Ray said.

FTX-induced anxiety continues in crypto markets. The fact that the company owes more than $3 billion to its major creditors fuels the concerns that the scale of the crisis will continue with a chain effect. In the developments last week, there were reports that BlockFi is preparing to file for bankruptcy. In addition, the announcement that Genesis, which provides liquidity to institutional companies in the crypto markets, has suspended the withdrawals related to the credit section, was seen as the first effects of the FTX collapse. While the current situation has weakened the trust in the crypto industry, the rhetoric that the industry needs to be regulated has started to increase again.