Crypto hack also causes damage to FTX: $600 million lost. Could it be an internal entity within the company?
Crypto hack also causes damage to FTX: $600 million lost. Could it be an internal entity within the company?
Security

Crypto hack also causes damage to FTX: $600 million lost. Could it be an internal entity within the company?

By Alessia Pannone - 18 Nov 2022

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As early as November 12, FTX officials confirmed rumors of a hacker attack on the collapsing crypto’s Telegram channel and instructed customers to delete FTX apps and avoid its website. 

Specifically, it appears that FTX reported a hacker attack with outflows of about $600 million in tokens. Some blockchain tracking sources speak of between 380 and 600 million dollars, which would have already been mobilized and converted into different amounts of different assets. 

Meanwhile, FTX itself has let it be known that the rest of the funds have already been moved to an offline container to avoid further economic losses due to unauthorized transactions.

Why do experts think the crypto hacker is someone internal to the FTX company?

According to an analysis conducted by blockchain intelligence firm Elliptic, out of the 600 million hacked, 477 million would be converted to ETH. Instead, the remaining 186 million appears to have been transferred to a secure repository belonging to FTX itself. 

The attacker is still draining wallets, in an action that analysts have called “on-chain spoofing.” In addition to that, according to blockchain security firm Beosin, the hacker reportedly conducted multiple cross-chain transactions and currently holds about $338 million in digital assets. 

The hacker’s haul includes 228,523 ETH, a sum equivalent to about $288.8 million. In other words, the entity, known as “FTX Accounts Drainer,” is now the 35th largest holder of ETH on Ethereum.

But why are experts led to believe that the crypto hacker is someone internal to the company? The answer is simple: because the exploits occurred on both FTX and FTX US. 

So, it is easy to infer that the hacker may be an individual inside the company. In particular, according to Hugh Brooks, Director of Security Operations at analysis firm Certik, on-chain evidence seems to support this theory.

Not just FTX, even Binance has suffered damage from hackers in the past 

Crypto hacks, as with many other industries, are nothing new to the blockchain world. Even before FTX, it was Binance, the blockchain crypto giant, that was hacked last October. 

Specifically, Binance had suffered at least $100 million in cryptocurrency theft, with an eight-hour halt to operations to prevent worse damage. However, Changpeng Zhao, CEO of Binance, while confirming the news at the time, was prompt in reassuring users. 

CZ, in fact, reassured users by stating that the damage had been addressed and resolved and that the funds were safe. In any case, CZ said, all lost money will be returned. 

Bloomberg, the worldwide broadcast satellite network, estimates that at least $2 billion worth of crypto assets have been stolen from their rightful owners in hacking attacks over the past year, in many cases from North Korea. 

Specifically, attackers sneak into open holes when transferring crypto between one blockchain and another, running a “bridge” connecting two different chains. 

In fact, that was exactly what happened to Binance: the attack occurred on BSC Token Hub, a bridge between the two chains that reference Binance, BNB Beacon Chain (BEP2) and BNB Chain (BEP20 or BSC). 

First the crash, then the hacker attack at FTX: how much confidence is there still in the crypto world? 

As is well known, recent events featuring the collapse of FTX, the subsequent market turmoil, and the loss of other major currencies have shaken the entire crypto and blockchain universe in no small part. 

Moreover, a hacker attack of this magnitude at such a time certainly does not make things any easier. One wonders how much confidence there can still be, then, in the crypto world. 

In fact, despite the bear market phase and the various “black swans” of 2022, interesting projects have sprung up that garner investor confidence, including Dash 2 Trade

Dash 2 Trade is a platform that appeals to traders and investors because it offers them a full suite of tools to trade the market to the best of their ability. Among these features are trading signals, automated trading, and a range of indicators. 

Particularly striking is the ability not only to create and customize a trading strategy but also to be able to test it in a virtual environment before moving on to actual trading.

D2T, moreover, also deals with social analytics, monitoring a cryptocurrency’s sentiment on Twitter and Reddit. This way, the trader can understand whether that crypto will be trending or not, especially in the short term.

So, good news for the crypto world: confidence is not collapsing and, indeed, seeing even other major past collapses such as the one that has happened to Bitcoin several times, we can potentially look forward to a good recovery in the sector, although it will take time and it is difficult to estimate.

Alessia Pannone

Graduated in communication sciences, currently student of the master's degree course in publishing and writing. Writer of articles from an SEO perspective, with care for indexing in search engines.

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