Sam Bankman-Fried’s bankrupt crypto empire, FTX US, had its assets drained shortly after filing for bankruptcy protection. According to a presentation made to the FTX creditor committee today, half of its $181 million worth of assets were “subject to unauthorized third-party transfers” following its bankruptcy filing. With a “Herculean investigative effort” to uncover this information, let’s take a look at what happened.
The day after the company filed for Chapter 11 bankruptcy protection on November 11, hundreds of millions of dollars were drained from the main exchange, FTX.com. It was reported that these transfers were unauthorized and made without permission from the creditor committee or court trustees. The amount stolen totaled approximately $90 million in assets belonging to FTX US customers and creditors.
It appears that someone—or multiple people—gained access to the security system of FTX and was able to make these unauthorized transfers without detection or authorization from anyone involved with the company or their creditors. It is unclear how they were able to bypass security measures and gain access to these funds, though it has been speculated that a hack may have occurred or someone with authorized access could have abused their privileges. It is also possible that a combination of these two scenarios could have taken place in order for someone to commit this type of fraud successfully.
If the individuals responsible for these unauthorized transfers are found, they will face serious repercussions for their actions as it is illegal under U.S. federal law to move funds from an account without authorization from the rightful owner(s). In addition, those responsible could also be held liable for any financial losses resulting from their actions as well as criminal charges if applicable depending on the severity of their offense(s). This incident serves as a reminder as to why it is important to secure your accounts with strong passwords and two-factor authentication whenever possible in order to protect yourself against potential fraudsters who may try and take advantage of unsuspecting users online.
It was recently revealed that $90 million worth of assets belonging to FTX US customers and creditors were drained out of their accounts without authorization shortly after filing for bankruptcy protection on November 11th. While the exact cause remains unknown at this time, it appears that someone gained access to their security system in order to commit fraud successfully without detection or authorization from anyone involved with the company or their creditors. This incident should serve as a reminder as to why it is important secure your accounts with strong passwords and two-factor authentication whenever possible in order to protect yourself against potential fraudsters who may try and take advantage of unsuspecting users online. As investigations continue into who was behind these unauthorized transactions and how they got access to FTX US systems, we hope that justice will be served soon enough.
