FTX cryptocurrency exchange hit by unauthorized transactions

Cryptocurrency exchange FTX descended into chaos on Saturday as the company said it had detected unauthorized transactions, and analysts flagged that millions of dollars in assets were withdrawn from the platform under “suspicious circumstances”.

FTX filed for bankruptcy on Friday after traders rushed to withdraw $6 billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal.

At least $1 billion in customer funds disappeared from the platform, sources told Reuters on Friday.

The company’s founder, Sam Bankman-Fried, had transferred $10 billion of client funds to his trading company, Alameda Research, the sources told the agency.

Further issues emerged on Saturday when FTX’s US Attorney General Ryne Miller said in a tweet that the company’s digital assets were being moved to so-called cold storage to “mitigate damage after observing unauthorized transactions”.

Cold storage refers to crypto wallets that are not connected to the internet to protect against hackers.

Blockchain analytics firm Elliptic said about $473 million worth of cryptocurrencies were “taken from FTX wallets under suspicious circumstances earlier this morning” but that it was unable to confirm that it had been stolen.

The collapse shocked investors and renewed calls for regulation of the cryptocurrency sector, whose losses have been accumulating so far this year as cryptocurrency prices collapsed.

“Things will continue to boil after the FTX crash,” said Alan Wong, chief operating officer of the Hong Kong Digital Asset Exchange.

“With an $8 billion gap between liabilities and assets, when FTX is insolvent, it will set off a domino effect, which will lead to a number of FTX-related investors either going bankrupt or being forced to sell assets. illiquid market, this event will lead to a new round of cryptocurrency decline, as well as a leverage liquidation.”