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FTX Suffers $400M Hack After Declaring Bankruptcy, Remaining Funds Moved to Cold Storage

2 mins
Updated by Kyle Baird
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In Brief

  • FTX was hacked of over $400 million during the early hours of Nov. 12.
  • The crypto community is speculating that the hack was an inside job.
  • A FTX official said the remaining funds have been moved to cold storage.
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About $400 million worth of cryptocurrency was siphoned from the beleaguered FTX exchange in the last few hours. After declaring bankruptcy just hours before, the exchange stated that it had been hacked.

The FTX Community Chat admin sent a message to the official Telegram group of the exchange stating that the bankrupt platform was hacked and all apps were malware.

The admin advised users to delete the app and not visit the website or open their mobile applications as they could end up with Trojans.

Over $380 Million in User Funds Gone

The actual amount withdrawn from the exchange is yet to be determined as sources claim it is between $380 million and $600 million.

According to Etherscan, the drainer address has processed more than 140 transactions and received funds from several wallets linked to FTX. In just two hours, the address received 83,878.63 ETH (over $105.3 million).

Besides receiving funds, the wallet also swapped USDT for DAI. It also moved funds across other networks like Binance Smart Chain and Solana.

Crypto intelligence firm Arkham Intelligence revealed that the hacker was incrementally dumping all assets into the CowSwap DEX aggregator.

FTX Hack Fund Movement Map Data by Arkham Intelligence
FTX Hacker Interacting With CowSwap (Source: Arkham Intelligence)

As of press time, Arkham also stated that the hacker had finished dumping LINK, MATIC, AAVE, and SHIB. The hacker still holds PAXG and SNX, which could be sold off at a later time.

Meanwhile, USDT issuer Tether has blacklisted $27.5 million USDT on Solana and $3.9 million USDT on Avalanche.

FTX Hack an Inside Job?

With a lot still unknown, many believe that if this is a hack, it has to be an insider job. Adam Cochran noted that the hacker had access to the “private key, root level on the website, and publisher key access to the apps.”

Another user highlighted that the breach included an Apple publisher key breach. This allowed the “hacker” to sideload malware into the FTX app. Many users are reporting that their FTX balance is now showing zero.

Many in the crypto community point to the fact that FTX has never been hacked since it started its operation. Therefore, the idea of the exchange being hacked immediately after filing for bankruptcy is shady.

Moving Funds to Cold Storage

However, official sources from the embattled firm are yet to confirm the development.

FTX.US general counsel Ryne Miller acknowledged that the exchange was investigating some “abnormalities with wallet movements related to the consolidation of FTX balances across exchanges.”

Miller further tweeted that the exchange moved its funds to cold storage following the spate of “unauthorized transactions.” He said:

“Following the Chapter 11 bankruptcy filings – FTX US and FTX [dot] com initiated precautionary steps to move all digital assets to cold storage. Process was expedited this evening – to mitigate damage upon observing unauthorized transactions.”

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Oluwapelumi Adejumo
Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.