FTX Hack Resulted in a Lot More Money Being Stolen
The panic surrounding FTX just got a lot bigger. As if the company doesn’t have enough problems to deal with, it is alleged that as much as $415 million in crypto funds were stolen from the exchange in a hack just after it began its bankruptcy proceedings.
FTX Has Lost More Money Than Originally Reported
The idea that FTX was attacked by cyberthieves is not new. Several sources have been talking about this for weeks, though initially, the stolen amount was believed to be about $45 million less. Thus, the damages suffered externally by the trading platform are far heavier than what was originally reported.
FTX is working to obtain as much money as it can in the coming weeks and months. As part of its Chapter 11 bankruptcy proceedings, the company must engage with debtors and provide regular updates regarding its attempts to recover lost funds and obtain the monies it needs to satisfy minimal payback options. Thus far, FTX is believed to have garnered as much as $5.5 billion in assets, which on paper, is a fantastic number.
However, when one considers the probability that FTX ultimately owes more than $40 billion to about 100 separate creditors, that number doesn’t look so fabulous. The bottom line is that the once golden exchange is now experiencing circumstances it may never escape. Current CEO John Ray III – who took over for Enron following its disaster – commented in an interview:
We are making important progress in our efforts to maximize recoveries, and it has taken a Herculean investigative effort from our team to uncover this preliminary information. We ask our stakeholders to understand that this information is still preliminary and subject to change. We will provide additional information as soon as we are able to do so.
The drama surrounding FTX is only getting started. What was once one of the top players in the digital finance arena has collapsed in a relatively short period, and it’s likely there are still many onlookers that are confused about what has occurred.
So Much Drama in So Little Time
FTX was a digital trading platform that rose to fame in 2019. Within three years, the company was considered one of the top five digital currency exchanges in the world, and its founder and chief executive – Sam Bankman-Fried – was lauded as a genius. However, this reputation didn’t last long as in November 2022, SBF took to social media to complain of a liquidity crunch.
He said that his company was short of funds and that it would need fast cash if it was to remain in business. Initially, he approached his largest rival Binance about a potential buyout, but the exchange immediately said “no,” citing the problems FTX was facing as too big for it to handle. From there, FTX filed bankruptcy and SBF resigned from his post.
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