US Department of Justice investigates “hack” perpetrated against FTX in November: Bloomberg

For Angel DiMatteo @shadowargel

The investigation of DOJ it is independent of the one carried out by the agency against Bankman-Fried and other executives. It seeks to determine who was responsible for the alleged hacking and the final destination of the funds stolen from FTX.

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  • DOJ opens investigation into the hack perpetrated against FTX in November
  • Said hack led to the theft of some USD $400 million
  • The hack is believed to have been perpetrated by a person from within FTX

The US Department of Justice (DOJ) officially opened an investigation into the alleged hacking perpetrated against FTX last month, which would have resulted in losses of around USD $400 million in the wallets of clients under the control of the exchange.

The information was published by the news agency Bloomberg, which cite sources with knowledge of the case who indicate that this new investigation is independent of the other charges against Bankman-Fried (SBF), who is charged mainly with fraud and embezzlement.

Investigating the flow of funds

According to the sources, the investigation comes into place because between November 11 and 12 massive flows of crypto capital began to emerge from the wallets of FTX and FTX.US, which were not made by users as normally could have happened.

After registering this irregular flow of funds, the General Counsel of FTX, Ryne Miller, indicated that the company was doing the corresponding investigations and later confirmed that it had been a hack. She urged users to be careful and asked them not to enter the exchange to avoid downloading malware that would put them at risk.

By the time the funds were withdrawn irregularly, the employees reported that they did not recognize the transfers that were taking place, and warned of a possible attack against the platform. Later the CEO of FTX, John Ray III, confirmed in a statement that the exchange had been the victim of a hack that resulted in losses close to USD $400 million, and that they were in contact with the authorities to begin the respective investigations.

According to some independent investigations, the indications suggest that it could have been an inside job since FTX, so the attacker could have been a member of the exchange with access to the cold wallets.

The quick action of the authorities and the coordination with various entities in the crypto sector allowed a part of the stolen funds to be frozen. However, the investigations are yet to determine who is responsible, as well as the whereabouts of the rest of the stolen assets.

The case against SBF and other managers

While this is happening, the case against SBF and the managers of FTX continues its course.

Regarding SBF, he is currently at his parents’ house in what he qualifies as house arrest, for which reason he assumes the legal process against him in freedom until the authorities determine otherwise.

For his part, the co-founder of FTX, Gary Wang, and the CEO of Alameda Research, Caroline Ellish, pleaded guilty to the crimes charged by the US authorities, for which they would be collaborating with the corresponding agencies in the ongoing investigations.


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Article by Angel Di Matteo / DailyBitcoin

Picture of Unsplash

CAVEAT: This is an informative article. DiarioBitcoin is a communication medium, it does not promote, endorse or recommend any investment in particular. It is worth noting that investments in crypto assets are not regulated in some countries. They may not be suitable for retail investors, as the entire amount invested could be lost. Check the laws of your country before investing.