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https://decrypt.co/118081/us-department-justice-investigating-mysterious-ftx-hack-report [decrypt co]
> FTX was hit with a mystery attack on November 11, shortly after it filed for Chapter 11 bankruptcy, adding a surprise twist to the saga around the exchange and its outspoken founder, Sam Bankman-Fried (SBF). The funds were then moved around to other exchanges and converted into different cryptocurrencies.
Given how much money was already being shifted from #FTX customers to #Alameda_Research, I'd suspect that most or all of this was done by insiders.
* https://nu.federati.net/url/289142 [decrypt co]
* https://decrypt.co/114205/ftx-files-chapter-11-bankruptcy-sbf-steps-down-as-ceo [decrypt co]
* https://nu.federati.net/url/289143 [www bloomberg com]
* https://decrypt.co/117695/year-of-the-hacks-biggest-exploits-and-hacks-of-2022 [decrypt co]
* https://pacer-documents.s3.amazonaws.com/33/188450/042020648197.pdf [pacer-documents s3 amazonaws com | PDF]
* https://decrypt.co/114246/rise-fall-sam-bankman-fried-ftx [decrypt co]
* https://decrypt.co/117021/grossly-inexperienced-unsophisticated-ftx-collapse [decrypt co]
> Blockchain analysts claim that about $650 million worth of cryptocurrency left the Bahamas-based digital asset exchange in the hack, making it one of the largest crypto attacks of 2022. However, FTX's bankruptcy filing notes that "at least $372 million" was stolen, suggesting some discrepancy in the accounting of the missing funds.
> Blockchain analysis firm Chainalysis confirmed to Decrypt last week that although Bahamian authorities did access FTX funds after its filing, as some news reports previously claimed, hackers indeed pilfered $650 million worth of funds at the time of the November attack.
> At the collapsed exchange's first court hearing, James Bromley—counsel to FTX's new management—said that a "substantial amount" of the exchange's assets are missing or have been stolen.
And more.
> FTX quickly collapsed last month after it became clear that the company did not have sufficient funds to back customers' assets. This was because Alameda Research, a sister company also founded by Bankman-Fried, had the ability to use FTX customer assets for its own means and without oversight, according to newly appointed FTX CEO John J. Ray III.
I was trying to figure out how Alameda could extract funds (both cryptocurrency and fiat currency) from customer accounts without anyone knowing. One article I read implied that Alameda was just able to run a negative balance on FTX that didn't show up on the accounting reports. This makes sense, because it means they didn't need to individually grab balances from each account and as long as FTX's other customers ran a net positive balance bigger than Alameda's negative balance, things could keep going.
It all collapsed because an industry publication wrote about the composition of Alameda's assets (in large part, consisting of an FTX-created token) which caused questions about the financial independence of the two organizations.
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It still means, however, that the exchange's customers got hurt because they didn't keep their balances at or around zero, as they should. When $ORGANIZATION encourages you to let them keep custody of your assets, they're probably not doing it just because it is more convenient for you, but because it makes it easier for them. And as you've seen, one of the ways it makes it easier for them is that it leaves assets lying around for them to pilfer.
An exchange should be pass-through and make its money on transaction fees. A bank is storage, and makes money by using your stored funds, along with fees. And when you're talking about #cryptocurrencies, you should be very explicit about the purposes for which you're using an intermediary, due to the whole _the person who holds the private key for the wallet where your #cryptocurrency resides effectively owns your cryptocurrency_ thing.