FTX Request Assistance From Fellow Exchanges to Recover Lost Fund

Putri Alivia Rifaih . November 21, 2022

Picture: Getty Image

Techspace - On Sunday, FTX tried to appeal to its fellow crypto exchanges for assistance, stating that funds embezzled from the befallen exchange are being transferred to other entities via intermediary wallets.

In order to collect the assets and restore them to the estate managing FTX's bankruptcy, the now-bankrupt business, led by new FTX Group CEO John J. Ray III, asked its fellow exchange business  to "take any measures" necessary.

Furthermore, FTX claims that the money was transferred from FTX Global "without authorisation," rather than being explicitly stated as having been stolen. Additionally, neither the exchanges where the assets were being transferred nor the wallet addresses to which they were linked to were mentioned by the company.

Unfortunate turn of events seems to greet FTX in the face day by day, the following day after the company declared bankruptcy for chapter 11 in the state of Delaware, now the questionable fund was seized from the business. In a more simple words, FTX has been hacked and the funds were drained from an ‘unauthorised’ transfer worth to be $650 millions according to ZachXBT, a trusted blockchain sleuth trusted by the DeFi community.

On Sunday, FTX stated on their twitter that “Exchanges should be aware that certain funds transferred from FTX Global and related debtors without authorization on 11/11/22 are being transferred to them through intermediate wallets”. Then it continues “Exchanges should take all measures to secure these funds to be returned to the bankruptcy estate.”

According to ZachXBT, some of the money seized from FTX was sent to two wallets—one on Solana and the other on Ethereum.

According to blockchain explorers for the relevant networks, several of the cryptocurrencies were subsequently linked to other blockchains, such as Binance Smart Chain, Polygon, and also Avalanche.

According to DeBank, as of Sunday, the Ethereum wallet connected to FTX's missing money had 98% of its total $258 million balance on Ethereum. It contained tokens worth $238 million and $14 million, respectively, representing 200,735 Ethereum (ETH) and 8,184.9 Pax Gold (PAXG). Additionally, it had a balance of 20 additional cryptocurrencies worth less than $100.

While Ethereum made up the majority of the wallet's balance, it also contained $1.7 million on Binance Smart Chain, mainly in the form of the stablecoin DAI, and roughly $4 million on Avalanche, nearly all of which was kept in the stablecoin Tether.

Although seemingly impossible, the assets could have a chance of recovery with the help of other fellow exchanges. Back in August, the funds taken from the Curve Finance hack accident  were frozen/recovered  by Binance in August, totaling $450,000, or about 83% of the approximately $570,000 in missing Ethereum.  

That’s not all, Binance was also able to recover another chunk of the money lost in an Incident in April, where a North Korean hacker group called the Lazarus Group attacked Axie Infinity’s Ronin Network and stole $622 million. Afterwards Binance was also able to identify $5.8 million which was spread across 86 different accounts. 

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