FTX works to secure assets after “unauthorized” transactions

Just 10 days ago FTX was considered the second largest cryptocurrency platform in the world
Just 10 days ago FTX was considered the second largest cryptocurrency platform in the world

The new CEO of troubled cryptocurrency platform FTX said on Saturday that the company is making “every effort to secure all assets” following unauthorized transactions potentially worth hundreds of thousands of dollars.

“Unauthorized access to certain assets has occurred,” CEO John Ray said in a statement tweeted by FTX general counsel Ryne Miller.

FTX officials did not specify the number of unauthorized transactions made, but cryptocurrency analytics firm Elliptic said in a report published Saturday that “$477 million is suspected to have been stolen.”

More than “$663 million in various tokens” had been drained from FTX wallets just 24 hours after the bankruptcy filing, Elliptic said, with the difference “believed to have been moved to safe storage by FTX itself.”

FTX US and FTX.com “continue to make every effort to secure all assets, wherever they may be located,” Ray, who specializes in corporate turnarounds, said in the statement.

The announcement comes a day after FTX filed for bankruptcy, part of a stunning collapse that has reverberated through the relatively new sector, sending other cryptocurrencies plummeting and drawing scrutiny from government regulators.

Additionally, the platform’s CEO, 30-year-old Sam Bankman-Fried, once considered a star in the cryptocurrency world, resigned.

Just 10 days ago, FTX was considered the second largest cryptocurrency platform in the world, at a point valued at $32 billion.

But the company is now left trying to reassure a skeptical public.

“Among other things, we are in the process of decommissioning and withdrawing and transferring as many traceable digital assets to a new cold wallet custodian,” Ray said in the statement.

The term “cold storage” refers to the transfer of cryptocurrency assets to a hardware “wallet” that is not connected to the Internet — to ensure its safety.

Ray added that he had “initiated an active fact review and mitigation exercise in response” to the unauthorized transactions.

Overnight, Miller had tweeted about an investigation into irregularities and other unclear movements, and by Saturday morning indicated that “unauthorized trades” had taken place.

FTX’s problems first emerged amid press reports that trading house Alameda Research was involved in a risky financial deal with FTX.com that appeared to involve serious conflicts of interest.

Financial media reported that FTX executives knew the platform was using billions in client funds to support Alameda.

Adding to the drama, Binance, the world’s largest crypto exchange, agreed to buy FTX.com on Tuesday — before calling off the acquisition just a day later.

FTX is being investigated by both the US Securities and Exchange Commission (SEC) and the New York state Department of Justice, according to the New York Times, which cited sources close to those investigations.

The fall from grace has even extended into the world of sports, where the Miami Heat announced that its FTX Arena is up for rebranding and the Mercedes Formula 1 team said it suspended a sponsorship deal with FTX and removed the company’s logos from her cars ahead of the Sao Paulo Grand Prix this weekend.

Leave a Reply

Your email address will not be published. Required fields are marked *