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A hacker behind unauthorized FTX crypto withdrawals has been identified, says rival exchange Kraken

November 12, 2022, 8:19 PM UTC
Sam Bankman-Fried resigned as FTX CEO yesterday as the crypto exchange declared bankruptcy.
Jeenah Moon—Bloomberg via Getty Images

Bankrupt digital-asset exchange FTX.com is launching an investigation with law enforcement into a series of unauthorized withdrawals that hit some of its crypto wallets on Saturday, an executive said.

Ryne Miller, general counsel for FTX’s US exchange, tweeted a statement attributed to the firm’s new chief executive John J. Ray that once the unauthorized withdrawals were spotted, “an active fact review and mitigation exercise was initiated immediately in response.” 

“We have been in contact with, and are coordinating with law enforcement and relevant regulators,” he added.

Rival crypto exchange Kraken said it will assist in the investigation. The perpetrator of the withdrawals moved some funds from a Kraken account to a wallet holding some of the stolen tokens on Saturday, blockchain security firm Hacken.io said, citing transaction data. Kraken was then able to identify the attacker by checking its platform for data on the original address, its chief security officer Nick Percoco said in a tweet.

FTX had begun moving some of its assets to offline wallets following its bankruptcy filing on Friday, Miller said previously in a tweet. It later expedited those moves “to mitigate damage upon observing unauthorized transactions,” he added. Miller reached out to Percoco over Twitter to ask if the two could work together.

“We can confirm our team is aware of the identity of the account associated with the ongoing FTX hack, and we are committed to working with law enforcement to ensure they have everything they need to sufficiently investigate this matter,” a Kraken spokesperson said in a text to Bloomberg News.

The attacker was “rapidly converting” some of the stablecoins and tokens gained from the heist into Ether, blockchain analytics firm Elliptic said earlier on Saturday, using decentralized exchanges. It valued the pile of stolen assets at more than $400 million.

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