FTX Seeks Aid from Other Exchanges in Securing and Replacing Lost Funds

    TheMorningCrypto Desk
    TheMorningCrypto Desk
    Published on November 22, 2022 9:05 AM

    Updated on January 9, 2023 12:51 PM

    FTX appealed for assistance from its partner cryptocurrency exchanges, pointing out that money stolen from the exchange in trouble is being transferred to other businesses through intermediary wallets.
    FTX Seeks Aid from Other Exchanges in Securing and Replacing Lost Funds
    Source: The New York Times

    50 investors owe more than $3 billion to FTX

    The 50 largest unsecured creditors of Sam Bankman-failed Fried's crypto enterprise FTX are owed more than $3 billion, according to new court records.

    John Ray III, the CEO of FTX and Sam Bankman-successor Fried, also disclosed on Saturday that the company has initiated a strategic examination of the assets of the exchange.

    Prior to a liquidity issue that led to the firm's failure earlier this month, FTX was the third-largest exchange in the world, valued at around $32 billion.

    Bankman-Fried predicted that FTX, his trading business Alameda Research, and linked firms would file for bankruptcy before stepping down on November 11.

    Binance suffered a similar attack by Lazarus but recovered

    The money might be partially recouped with the aid of other trades.

    Amounts taken from Curve Finance were frozen by Binance in August, totaling $450,000, or about 83% of the approximately $570,000 in missing Ethereum.

    In April, Lazarus Gang, a North Korean hacker group, attacked Axie Infinity's Ronin Network and stole $622 million, however, Binance was able to recover a chunk of the money lost in that incident.

    86 separate accounts totaling $5.8 million were caught by Binance.

    FTX group CEO asked its peers to “take all measures” 

    In order to collect the monies and restore them to the estate managing FTX's bankruptcy, the now-bankrupt business, led by new FTX Group CEO John J. Ray III, asked its peers to "take any measures" necessary.

    The business claimed that cash was being transferred to them from FTX. The money was transferred from FTX Global "without authorisation," rather than being explicitly stated as having been stolen by FTX.

    Additionally, neither the exchanges knew where the money was being transferred nor the wallet addresses to which they were tied mentioned by the company.

    A day after FTX filed for Chapter 11 bankruptcy in the state of Delaware, the ill-gotten money in question was seized from the business. 

    According to ZachXBT, a pseudonymous blockchain investigator who is well-liked in the DeFi community, the breach had a worth of almost $650 million.

    FTX's missing money had 98% of its total on Ethereum

    According to ZachXBT, some of the money seized from FTX was sent to two wallets—one on Solana and the other on Ethereum.

    Later, several of the cryptocurrencies, such as Binance Smart Chain, Polygon, and Avalanche, were bridged to other blockchains.

    According to DeBank, as of Sunday, the Ethereum wallet connected to FTX's missing money had 98% of its total $258 million balance on Ethereum.

    It possessed tokens worth $238 million and $14 million, respectively, valuing 200,735 Ethereum (ETH) and 8,184.9 Pax Gold (PAXG). Additionally, it had a balance of 20 additional cryptocurrencies worth less than $100.

    Related: Solana Still Trapped Inside FTX Implosion

    While Ethereum made up the majority of the wallet's balance, it also had $1.7 million on Binance Smart Chain, largely in the form of the stablecoin DAI, and roughly $4 million on Avalanche, nearly all of which was kept in the stablecoin Tether.