FTX says it’s victim of ‘unauthorised transactions’
Company moves digital assets to cold storage
New York: A day after it filed for bankruptcy, the deeply troubled cryptocurrency platform FTX has taken action to halt what it said were “unauthorised transactions.”
The company took “precautionary steps to move all digital assets to cold storage... to mitigate damage upon observing unauthorised transactions,” FTX’S general counsel, Ryne Miller, said on Twitter.
“Cold storage” refers to moving cryptocurrency assets to a hardware “wallet” unconnected to the Internet – to assure its security.
Miller said the company was “investigating abnormalities with wallet movements related to consolidation of FTX balances across exchanges,” adding, “unclear facts as other movements not clear.”
There was no further explanation, though Miller promised more information once the situation is clarified.
FTX’S stunning collapse has reverberated through the relatively young sector, sending other cryptocurrencies plummeting and drawing scrutiny from government regulators.
The latest setback came a day after the platform’s chief executive, 30-year-old Sam Bankman-fried, once considered a star in the freewheeling cryptocurrency world, resigned.
He was succeeded by John J. Ray III, who specialises in corporate turnarounds.
FTX, considered as recently as 10 days ago to be the world’s second-largest cryptocurrency platform, with a valuation of some Us$32bil (Rm148.07bil), has suffered a series of shocking setbacks.
The company’s troubles first surfaced amid press reports that its Alameda Research trading house was involved in a risky financial arrangement with Ftx.com that appeared to involve grave conflicts of interest.
Financial media reported that FTX executives knew the platform was using billions in customer funds to prop up Alameda.
Adding to its woes at a time when the sector is still struggling for credibility was the move by the world’s largest crypto exchange, Binance, on Sunday to sell a
cryptocurrency linked to FTX, then to seek to purchase Ftx.com last Tuesday before retracting its offer last Wednesday.
FTX is being investigated by both the US Securities and Exchange Commission
(SEC) and the New York state Justice Department, according to the New York Times, which cited sources close to those inquiries.
In sports, the NBA’S Miami Heat announced that its basketball stadium, FTX Arena, would be renamed.