Home Hacking Feds investigating $372 million FTX hack: report

Feds investigating $372 million FTX hack: report

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The U.S. Department of Justice has launched an investigation into a $372 million cryptocurrency theft on defunct exchange FTX shortly after the company declared bankruptcy.

The hacking investigation is separate from the federal fraud case against disgraced FTX founder Sam Bankman-Fried, Bloomberg reported.

Bankman-Fried, 30, is not suspected of the theft. Shortly after the crypto robbery was initially reported in mid-November, he theorized it was an inside job executed by someone else at FTX as the company collapsed.

FTX founder Sam Bankman-Fried leaves Manhattan Federal Court after his arraignment and bail hearings on Dec. 22.

An estimated $372 million was siphoned from FTX the same day it declared bankruptcy. Federal investigators have managed to freeze some of the stolen money, but the vast majority remains unfrozen, according to Bloomberg. Some of the money was converted into different cryptocurrencies.

No suspects have been identified, and Bloomberg sources did not confirm Bankman-Fried’s theory about an inside job.

“I’ve narrowed it down to like eight people,” Bankman-Fried said in an interview before he was arrested. “I don’t know which one it was.”

Bankman-Fried was arrested at his home in the Bahamas on Dec. 12. He was extradited to the U.S. on Dec. 21 and then released on $250 million bail to his parents’ home in the San Francisco Bay Area.

Until FTX’s collapse in November, Bankman-Fried was a crypto star worth billions on paper. His company announced itself with splashy ads featuring celebrities, including Larry David.

But crypto began to collapse in late 2022, and FTX lost significant value. One of its competitors, Binance, planned to buy out FTX, but bailed on the deal after looking closer at the company’s finances. FTX and Bankman-Fried filed for bankruptcy.

According to the feds, Bankman-Friend and his pals at FTX used customer money to make highly speculative investments through another company, Alameda Research. Many of those bets failed.

Two of Bankman-Fried’s FTX friends have already flipped, pleading guilty to fraud counts and agreeing to testify against him.

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