FTX: It Got So Much Worse Friday Night

Hundreds of millions in customer funds that were held in FTX wallets were moved last night and most of it wasn't from the liquidation team. Some say hacker. But this is almost certainly an inside job.

If, like me, you thought this FTX meltdown saga was close to its conclusion with the announcement of Chapter 11 bankruptcy proceedings yesterday, boy was that wrong. Late last night ethscan sleuths monitoring FTX’s wallet addresses started to point out odd fund movements.

foobar @0xfoobar

Hundreds of millions of dollars are now flowing out of FTX wallets, some speculate liquidators but it's late on a friday night, not typical times for such rapid heavy movements. Some withdrawals are being swapped from Tether to DAI. Hack or insider actions? $26 million here

What made a lot of these moves particularly concerning was they weren’t strategic moves. In many cases, there was high slippage (fund loss) because of how quickly who ever did this was trying to do swaps at whatever rate he/she could get. On-chain analyst Foobar:

This is super sketchy, no liquidator would be taking actions like this

There was over $600 million in ETH tokens drained from FTX’s reserves last night and reportedly another $90 million in Solana that was swapped to ETH.

Dune Analytics/21 Shares

It seems a little over half of this outflow was taken by the “hacker” and the rest was quickly moved out by the team overseeing the liquidation. Ryne Miller is the General Counsel on the liquidation team and he acknowledged many of the funds that moved last night were not authorized transactions.

Soooo, that means they were stolen. And as one final “FU,” to customers, FTX’s app tried to push an app update that would have potentially installed a phishing attack that could have compromised private keys securing funds from self-custodial wallets. Despicable.

Interestingly, the normally chatty SBF was completely silent on Twitter last night while the remaining funds from his business were vanishing. CZ wasn’t silent though:

CZ 🔶 Binance @cz_binance

What a sh!t show... And it's going to be crypto's fault, (instead of one guy's fault)...

That’s one impressive “hacker.” This sure appears to be an inside job and if the authorities ever find Sam he’s probably in a lot of trouble. Stay safe out there, guys.