This is likely going to be a top-rated documentary on Netflix streaming soon. The fallout of FTX, formerly a crypto exchange at one time worth $32 billion by January 2022, has filed bankruptcy, and over $1 billion of client funds have gone missing, per Reuters.
Over the weekend, over $400 million worth of crypto funds reportedly vanished in an alleged hack, and CEO Sam Bankman-Fried remains in the Bahamas, where FTX is headquartered. This number has now been updated to $1 billion.
Rumors swirled over the weekend that Bankman-Fried was fleeing to South America, or even Saudi Arabia, where there are no extradition laws. He has denied leaving the Bahamas.
A potential hack occurred Friday, claims FTX, after filing for bankruptcy. Ryne Miller, FTX US’s general counsel, confirmed in a Saturday tweet that FTX and FTX US had started moving all digital assets to cold storage. Cold storage in the cryptocurrency world means a crypto wallet not connected to the internet.
“FTX is investigating abnormalities with wallet movements related to the consolidation of FTX balances across these exchanges,” Miller said on Twitter.
“FTX will share more information as soon as we have it,” he continued.
According to the Wall Street Journal, approximately $371 million in crypto assets appear to be stolen or missing from FTX without permission. More than $220 million of the tokens were quickly converted to the stablecoin dai or ether.
Another $186 million was also moved out of FTX accounts, likely to secure storage.
Crypto exchange Kraken has said it has been able to identify the user of the account associated with the unauthorized withdrawals from FTX.
“We know the identity of the user,” said Nick Percoco, chief security officer at Kraken, in a tweet.
Traders rushed to withdraw $6 billion from FTX in just 72 hours from FTX, forcing it into bankruptcy. Rival exchange Binance, after pursuing due diligence in a possible acquisition, abandoned its intent to acquire FTX.
FTX had a gap of $8 billion between liabilities and assets, a classic case of extreme over-leverage.
Bitcoin dropped below $16,000 for the first time since 2020 after Binance announced it was abandoning a rescue deal on Wednesday.
This story has been updated to reflect new developments from Reuters.
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