Finance

FTX investigating whether assets were stolen one day after firm files for bankruptcy

FILE – An advertisement for Bitcoin cryptocurrency is displayed on a street in Hong Kong, on Feb. 17, 2022. (AP Photo/Kin Cheung, File)

The general counsel for cryptocurrency trading company FTX announced on Saturday that the exchange is investigating unauthorized transactions.

“Following the Chapter 11 bankruptcy filings – FTX US and FTX [dot] com initiated precautionary steps to move all digital assets to cold storage,” lawyer Ryne Miller wrote on Twitter.

“Process was expedited this evening – to mitigate damage upon observing unauthorized transactions,” Miller added.

FTX filed for bankruptcy on Friday after losing $10 million in users’ deposits through affiliated trading firm Alameda Research. Sam Bankman-Fried stepped down as CEO the same day.

On Friday night, Miller reported that the company was “investigating abnormalities with wallet movements related to consolidation of ftx balances across exchanges.”

FTX’s chief restructuring officer and CEO, John Ray, released a statement on Saturday ensuring users that the firm is making “every effort to secure all assets.”

“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,” Ray wrote.

“As widely reported, unauthorized access to certain assets has occurred,” Ray added.

The CEO, who previously led failed energy company Enron through bankruptcy, added that FTX launched an “active fact review and mitigation exercise” directly after the unauthorized exchanges were identified.

The company is also in contact with law enforcement and various regulators, according to Ray.

Tags Alameda Research Chapter 11 bankruptcy FTX investigation John Ray Ryne Miller Sam Bankman-Fried
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