FTX: Collapsed crypto exchange says US$415m was hacked

156
Sam Bankman Fried

BBC

18th January 2023 – (New York) Collapsed cryptocurrency exchange FTX says that around $415m (£338m) of crypto has been stolen by hackers.

About $323m was hacked from its international exchange and $90m from its US platform since the firm filed for bankruptcy, FTX’s CEO says.

FTX co-founder Sam Bankman-Fried has been accused of stealing billions of dollars from FTX users to pay debts at his other firm, Alameda Research.

Mr Bankman-Fried has pleaded not guilty to fraud charges.

Last week the company told a bankruptcy judge in Delaware that it had recovered more than $5bn in assets.

On Tuesday FTX provided further details, saying that it had recovered $1.7bn in cash, $3.5bn in so-called liquid cryptocurrency and $300m in liquid securities.

In finance the term “liquid” means that an asset can be easily converted into cash without affecting its value.

The firm also said that it had identified significant shortfalls at both its international and US exchanges.

However, it did not give an estimate of total liabilities.

FTX, which a year ago was valued at $32bn, filed for bankruptcy protection on 11 November. It has been estimated that $8bn of customer’s funds was missing.

Mr Bankman-Fried, who co-founded FTX in 2019, was one of the most high-profile figures in the cryptocurrency industry, known for his political ties, celebrity endorsements and bailouts of other struggling firms.

He was arrested in December in the Bahamas, where he lived and FTX was based.

Mr Bankman-Fried was extradited to the US, where he was freed on a $250m bail package. His bail conditions required that he wear an electronic monitoring bracelet and remain largely confined to the California home of his parents, law professors at Stanford University.

In a press conference last month, federal prosecutors said the meltdown at the platform, which allowed customers to buy and sell digital tokens, stemmed from “intentional fraud”.

Prosecutors accused Mr Bankman-Fried of misappropriating FTX customer funds to pay debts at his other company, Alameda, and to make other investments.

They announced eight criminal charges, including wire fraud, money laundering and campaign finance violations. Financial regulators also brought claims against Mr Bankman-Fried. He has denied the charges.

Later on Tuesday, Mr Bankman-Fried reiterated his claim that “FTX US is solvent, as it always as been”.

In an interview with BBC News before his arrest, he said: “I didn’t knowingly commit fraud. I don’t think I committed fraud. I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was.”

Comments