FTX says $415 million worth of crypto has been hacked

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Bankrupt crypto firm FTX said on Tuesday that $415 million worth of crypto was hacked from exchange accounts, representing a significant portion of the identified assets the company is trying to recover.

In a presentation titled Maximizing FTX Recoveries, FTX Debtor Lawyers and Advisors updated the total liquid assets identified for recovery and said they were valued at approximately $5.5 billion.

However, this includes unauthorized third-party transfers of $323 million from FTX.com (the international business) and $90 million from FTX US, the company said in a statement. Another $2 million from Alameda Researchs crypto hedge fund was also stolen. The missing crypto could be connected to a bunch of FTX systems that were discovered shortly after the company went bankrupt in November.

At the time, the stolen crypto was valued at $477 million, according to blockchain analytics firm Elliptic.

FTX filed for bankruptcy after a wave of withdrawals crippled the exchange and sister hedge fund Alameda. Founder and former CEO Sam Bankman-Fried was indicted by federal prosecutors for fraud and money laundering in December. Bankman-Fried pleaded not guilty to the charges in January and was released on $250 million bail ahead of his trial, which is scheduled for October.

FTX advisers are also considering a $2.1 billion share buyback payment from FTX to crypto exchange Binance in the third quarter of 2021. Binance was the first outside investor in FTX, but Bankman-Fried has bought out Binances’ stake in his company in 2021.

During an appearance on CNBC in December, Binance CEO Changpeng CZ Zhao was asked about the potential recovery of $2.1 billion in FTX’s bankruptcy proceedings.

I think I’m fine leaving that to the lawyers, Zhao said, when asked if he was willing to return the money. I think our legal team is perfectly capable of handling it.

The 20-page presentation from FTX’s attorneys and advisers provides a breakdown of FTX’s assets and where they are looking for potential recoveries that could be returned to debtors. This includes hundreds of millions of dollars in assets in the Bahamas, where Bankman-Fried lived and ran the business.

We are making significant progress in our efforts to maximize recoveries, and it took a Herculean investigative effort by our team to uncover this preliminary information, said John Ray, who served as CEO of FTX during the restructuring, in a statement from Tuesday.

Despite the separation of liquid from illiquid tokens, the presentation included $529 million of self-issued tokens by FTX, FTT, under the exchange’s liquid assets. The FTT has lost more than 90% of its value since early November.

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