Just when the news of insolvency and probe surfaced, FTX is facing yet another challenge: a sudden attack on its app and a huge amount of funds transferred out from FTX wallets.
Since last night, there have been many suspicious movements surrounding the FTX exchange after its insolvency. With the teams resigning and fleeing out of the Bahamas to escape the investigations by the regulators, the company itself is in a huge crisis and loss under the leadership of Sam Bankman-Fried.
Here’s an explanation of the situation.
Attackers drain ~$380M from FTX wallets
Recently, many investigation accounts on Twitter began reporting on a wallet address that is draining out the funds, estimated to be around $380M from FTX and FTX US wallets. The amount is reportedly sent to another address: 0x59ABf3837Fa962d6853b4Cc0a19513AA031fd32b, reported by Nansen.
Based on the on-chain data, the following image shows the exact movement of the funds:
The attackers took out funds and began converting around 26M from Tether to DAI, and later $44 million of stETH for ETH. @0xf00bar explains the whole situation saying that it’s “sketchy” for liquidators to be involved.
For a bankrupt firm, this is quite suspicious because FTX has been under investigation for the losses by the US authorities. There’s a high probability that the funds are being stolen by liquidators or insiders, but there’s also a possibility of hackers taking advantage of the exchange’s situation.
FTX app malware detected!
FTX telegram admins have reported that the FTX app has malware and advised users to uninstall the application from their phones before their accounts fall under the attack. Additionally, the website is also under attack.
This is quite alarming for users who still cannot withdraw their funds at the moment. Although the exchange continued its operations, the accounts can only take out limited amounts.
Following the news of hacks and wallets drained out, the exchange’s US Counsel Ryne Miller came on Twitter to announce that the team is currently investigating the case.
FTX getting hacked and funds draining out at an alarming rate means more loss to the users. Whether this is a stunt pulled by liquidators to steal the funds and run away from the investigators or by hackers who grabbed the opportunity during the vulnerability of the exchange, the users are most likely to suffer from this.
As of now, SBF hasn’t responded to the situation. Despite his promise to protect the remaining funds and comply with the investigators, the FTX exchange is going even more downhill after the hack.