John Ray, the new FTX Chief Restructuring Officer and CEO, confirmed on Sunday in a statement that “unauthorized access” to certain assets had occurred, following reports of suspicious activity on the platform.
1/ Statement from John Ray, Chief Restructuring Officer and CEO of @FTX_Official — Consistent with their obligations as Chapter 11 Debtors-in-Possession, FTX US and FTX [dot] com continue to make every effort to secure all assets, wherever located.
— Ryne Miller (@_Ryne_Miller) November 12, 2022
Though FTX officials have not specified the amount of assets missing, blockchain analysis firm Elliptic estimated that US$477 million was lost in the suspected theft.
The theft could be yet another hit to investors with funds stuck in the illiquid exchange. An FTX.com balance sheet shared with investors a day before its bankruptcy showed US$9 billion in liabilities and only US$900 million in liquid assets, according to a Monday Bloomberg report.
After filing for Chapter 11 bankruptcy on Friday, FTX wallets were being drained to be moved to cold storage, a process which was expedited “to mitigate damage upon observing unauthorized transactions,” General Counsel at FTX US Ryne Miller said in a tweet Saturday.
Following the Chapter 11 bankruptcy filings - FTX US and FTX [dot] com initiated precautionary steps to move all digital assets to cold storage. Process was expedited this evening - to mitigate damage upon observing unauthorized transactions.
— Ryne Miller (@_Ryne_Miller) November 12, 2022
The exchange is 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,” said FTX CEO Ray.
In response to the incident, the company will be “coordinating with law enforcement and relevant regulators,” Ray added.
