FTX Investigating Possible $515 Million Hack After Bankruptcy Filing

When cryptocurrency is stolen, it’s often difficult for the thieves to convert it into usable cash. Because crypto transaction records are public, experts can track the movement of the funds, gathering clues about the identities of the thieves.

But a major theft would probably make it even more difficult for FTX to refund customers and other creditors who have already lost billions of dollars in the firm’s collapse.

After failing to meet a surge of withdrawal requests this past week, FTX is estimated to owe $8 billion, according to people familiar with the matter. Amateur investors stored their crypto savings on FTX, which was widely regarded as a safe and easy-to-use platform, even in the wild world of crypto. How much those customers are repaid will depend on the bankruptcy process. In an initial filing on Friday, FTX said it had more than 100,000 creditors.

As speculation about the FTX fund transfers spread on Twitter, crypto industry officials appeared to be piecing together the situation in real time. After reports circulated that someone involved in moving funds had an account on Kraken, another crypto exchange, Kraken’s chief security officer, Nick Percoco, tweeted, “We know the identity of the user.”

Ryne Miller, the general counsel of the U.S. arm of FTX, quickly responded. “Interested in anything you are open to share,” he said. “Could you reach out to me?”

A Kraken spokesman did not immediately respond to a request for comment.

This is a developing story. Check back for updates.

Article source: https://www.nytimes.com/2022/11/12/business/ftx-cryptocurrency-hack.html