Crypto

Hacking Fears After $650M Demise From Collapsed Crypto Firm

Cryptocurrency exchange FTX is facing fresh controversy after observers noticed “unusual” withdrawals totaling around $650 million from the collapsed website’s funds on Saturday.

The collapse of FTX, one of the world’s largest stock exchanges, has wiped $150bn (£126bn) of value from the cryptocurrency market, amid fears the crisis could escalate. further aggravates.

FTX filed for bankruptcy protection in the United States on Friday following a liquidity crunch that left the crypto exchange unable to meet customer demands for billions of dollars in withdrawals.

In the hours following the collapse, there were “anomalies with portfolio movements,” said FTX’s U.S. branch general counsel Ryne Miller, prompting fears the site may have been pirate.

Mr Miller wrote on Twitter that FTX began transferring digital assets to cold storage – non-internet connected wallets – after its bankruptcy on Friday, and said the process was then accelerated “to mitigate damage during observation of unauthorized transactions”.

Until last week, the company was one of the top five cryptocurrency trading sites in the world, handling tens of billions of dollars in trade every day. Concerns about its balance sheet following an article in the industry press triggered its liquidity crisis.

Sam Bankman-Fried, the founder of FTX, was yesterday forced to deny he had flown to South America following speculation on Twitter, telling reporters he was still in the Bahamas.

Changpeng Zhao, the billionaire founder of Binance, the world’s largest crypto exchange, has warned that the “cascading effects” of FTX’s collapse risk triggering the crypto equivalent of the 2008 financial crisis.

The value of the global crypto market rose from around $1 trillion to $853 billion on Friday night, according to data from website CoinMarketCap, amid a wave of selling.

Bitcoin fell to its lowest level in two years against the dollar, trading at around $16,000. It hit an all-time high above $68,000 almost exactly a year ago.

Millions of people have investments in the sector, with major US exchange Coinbase claiming to have more than 100 million customers worldwide.

However, prices have fallen rapidly over the past 12 months amid slowing interest as rising rates made the sector less attractive.

Dan Ives, technology analyst at Wall Street firm Wedbush, said the turmoil signifies a “crypto winter” that has already sent digital asset values ​​plunging this year now risks “turning into an ice age.”

Carol Alexander, professor of finance at the University of Sussex, said: “There will be massive bankruptcies. The contagion could last for weeks.

Blair Halliday, UK boss of cryptocurrency exchange Kraken, said the FTX crisis will negatively affect consumer perception of cryptocurrencies “for years to come” and called for more regulation to stabilize the industry.

The U.S. Securities and Exchange Commission (SEC) and the Department of Justice are both investigating FTX, according to the Wall Street Journal.

Zhao said FTX’s demise represented “another really big downside player” after digital currency Luna collapsed in May.

“With this type of event happening, it’s devastating. A lot of consumer confidence is shaken,” he said at a conference in Indonesia.

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