US Justice Department Probing $400 Million FTX Hack

<p>The US Department of Justice is investigating the theft of around $400 million from the collapsed <a href="https://www.financemagnates.com/terms/c/cryptocurrency-exchange/" target="_blank" id="601e2e5f-0c28-4253-9ad4-5e6b251ba2fa_1" class="terms__secondary-term">cryptocurrency exchange</a>, FTX. The hacking incident happened a day after the crypto exchange and its subsidiaries filed for <a href="https://www.financemagnates.com/terms/b/bankruptcy/" target="_blank" id="41b3ef0d-d805-441d-8443-121890264e94_1" class="terms__main-term">bankruptcy</a>.</p><p>US Justice Department Probing FTX Hack</p><p>The prosecutors have not filed any charges yet, so there is no official confirmation of the investigation. However, Bloomberg reported on the matter citing anonymous sources.</p><p>The criminal investigation is separate from the array of fraud charges the FTX Founder and former CEO, Sam Bankman-Fried, is facing for his alleged misdeeds with the operations of the doomed crypto exchange. Bankman-Fried’s <a href="https://www.financemagnates.com/cryptocurrency/sam-bankman-frieds-two-top-associates-plead-guilty-to-criminal-charges/" target="_blank" rel="follow">two top executives</a>, Caroline Ellison and Zixiao (Gary) Wang, also faced criminal charges and have pled guilty.</p><p>In addition, the United States markets regulator, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) brought civil charges against all three company executives.</p><p>Check out the recent London Summit session on "Digital Assets’ Marketing Under A Magnifying Glass."</p><p>Justice Department Working to Clarify FTX Hack</p><p>Company employees noticed massive outflows from the crypto wallets controlled by the company and its US subsidiary between November 11 and the early hours of November 12. Over an hour after the suspected hack, FTX’s General Counsel Ryne Miller tweeted on the initiation of investigation on the “abnormalities with wallet movements.”</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">Multiple former FTX employees confirmed to me they do not recognize these transfers for ~$383m <a href="https://t.co/YcqT0jrqIQ">https://t.co/YcqT0jrqIQ</a></p>— ZachXBT (@zachxbt) <a href="https://twitter.com/zachxbt/status/1591276687228035074?ref_src=twsrc%5Etfw">November 12, 2022</a></blockquote><p>Though the official Twitter handle of FTX has not confirmed anything, the official company support channel on Telegram pinned a message, stating: “FTX has been <a href="https://www.financemagnates.com/cryptocurrency/ftx-hacked-1bn-drained-from-ftx-and-ftx-us-accounts-so-far/" target="_blank" rel="follow">hacked</a>. FTX apps are malware. Delete them. Chat is open. Don’t go on FTX site as it might download Trojans.”</p><p>FTX’s CEO, John Jay Ray III, who took over after Bankman-Fried stepped down, confirmed the hack through a statement issued via the General Counsel’s Twitter handle.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">2/ Among other things, we are in the process of removing trading and withdrawal functionality and moving as many digital assets as can be identified to a new cold wallet custodian. As widely reported, unauthorized access to certain assets has occurred.</p>— Ryne Miller (@_Ryne_Miller) <a href="https://twitter.com/_Ryne_Miller/status/1591495429338071042?ref_src=twsrc%5Etfw">November 12, 2022</a></blockquote><p>According to blockchain experts, at least $372 million in customer funds were siphoned from the two FTX platforms. Though CEO Ray III confirmed that the incident was reported to law enforcement, many experts suspect that the incident might be an inside job.</p><p>Meanwhile, Bankman-Fried has been extradited to the United States after his <a href="https://www.financemagnates.com/cryptocurrency/sam-bankman-fried-arrested-in-the-bahamas-amid-us-criminal-charges/" target="_blank" rel="follow">arrest in the Bahamas</a>. He is now out on a <a href="https://www.financemagnates.com/cryptocurrency/us-court-grants-bail-to-sam-bankman-fried-on-hefty-250m-bond/" target="_blank" rel="follow">$250 million bail bond</a>, a legal option that has been questioned by many. </p> This article was written by Arnab Shome at www.financemagnates.com.

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