Who is Responsible for the FTX Hack Involving $400 Million? The Truth is Unveiled
Three individuals are currently being charged for their involvement in a sophisticated SIM-swapping scheme that resulted in the theft of more than $400 million from FTX, a prominent cryptocurrency exchange. This illegal operation took place shortly after the resignation of FTX’s founder, Sam Bankman-Fried.
The Department of Justice has identified the accused as Robert Powell, Emily Hernandez, and Carter Rohn, residents of Illinois, Colorado, and Indiana, respectively. Over a span of two years, they targeted FTX and numerous other individuals, gathering personal information from approximately 50 victims. By convincing cell phone providers to transfer the victims’ phone numbers to their control, the trio gained the ability to intercept text messages, including authentication codes for multi-factor authentication. This allowed them to access the victims’ financial accounts and cryptocurrency wallets.
Although the court documents do not explicitly name FTX, insiders familiar with the case have confirmed that the exchange, referred to as “victim company-1” in the court filings, was indeed FTX. The lax security measures implemented by FTX made it an attractive target for SIM-swapping attacks.
FTX’s recent filing for bankruptcy has exposed vulnerabilities within the company, raising concerns about regulatory risks associated with stablecoin issuers. JPMorgan analysts have pointed out the risks associated with Tether, citing transparency and compliance issues. Regulatory scrutiny on a global scale presents challenges, but stablecoin issuers who adhere to regulations may be able to gain a larger share of the market.
FTX has sought to reassure its customers and creditors that they may be able to recover their funds in full, provided they can provide evidence of their losses. The compensation plan involves evaluating cryptocurrency prices from November 2022. However, FTX has clarified that it has no intentions of resuming its operations.
Following the announcement, FTX’s native token, FTT, experienced significant volatility. Initially, it surged by more than 11%, but it subsequently faced a 15% decline. The market is uncertain about FTX’s future, especially with its former CEO, Sam Bankman-Fried, currently serving time in prison while awaiting final sentencing.
In conclusion, FTX has faced an immense challenge with over 36,000 claims totaling around $16 billion. Last year, there were doubts about the company’s ability to repay everyone, with estimates suggesting that only around 90% of customers would be compensated. However, FTX is now more optimistic, believing that it has sufficient funds to satisfy all valid claims from customers and creditors.