A potential $500M FTX hack, fraud investigations and millions in funds sent to wrong addresses start off the week.
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$500M stolen from FTX hours after bankruptcy 🚨
Multiple sources have confirmed that following discovery of an $8 billion hole in the once-leading, now-bankrupt exchanges finances, $477 million was stolen by hackers. The loss adds to the woes of customers who now will recover even less. Suspicions of an inside job were raised, and outrage grew after allegations that founder and former CEO Sam Bankman-Fried used an accounting back door to hide a $10 billion transfer to his trading firm Alameda Research that included a huge chunk of customer funds. Meanwhile, Elon Musk said he turned down a Bankman-Fried Twitter investment because his “bullshit meter was redlining.”
Crypto.com accidentally sent $400M to rival exchange 😮
If timing is everything, Crypto.com’s massive transfer of 80% of its total Ether holdings to a Gate.io exchange wallet rather than an internal cold wallet couldn’t get much worse. Funds were never in danger as the receiving wallet was one of Crypto.com’s own at the rival exchange. But it caused alarm and then quality control questions just as Crypto.com was attempting to get a now-vital Proof of Reserves audit started. Reports say it also may have set off, or at least strengthened, a rush to the exit by customers who pulled $53 million into private self-custody wallets.
FTX implosion drives investors to self-custody 🔑
“Not your keys, not your crypto” is one of the oldest and most widely given pieces of advice to crypto newcomers. The sudden implosion of FTX, one of the largest and most respected exchanges, in less than a week seems to be driving more investors to take heed. A record 106,000 BTC was off-ramped from centralized exchanges last week, with small, medium and large investors (but not whales) pulling funds. It came as crypto exchange CEOs and big investors reminded people of that bit of wisdom.
FTX collapse is drawing criminal investigators’ attention 🔍
Criminal investigators are joining securities regulators in diving into the wreckage of FTX in search of misdeeds and bad actors. Along with the U.S. Department of Justice, the Bahamas police announced it is going to “investigate if any criminal misconduct occurred.” Allegations of customers’ funds being secretly shifted to its Sam Bankman-Fried’s ailing Alameda Research trading firm, a $477 million hack, and the unexplained and premature release of $400 million in FTX’s FTT tokens have played a part. Unconfirmed reports have Bankman-Fried and several top FTX Group execs “under supervision” in the Bahamas.
Apple’s AR/VR headset will launch Meta battle 🤓
Apple’s high-end, high-priced and highly anticipated augmented reality/virtual reality headset is expected soon. It will reportedly have far better features than Meta’s $1,500 Meta Quest Pro, as well as a price that could be double that. More importantly, it sets up a “philosophical battle” between Zuckerberg, who believes in “traditional” gaming-style, avatar centered immersive reality that will dominate work and play, and Apple. The latter seems to be heading to a more AR future, and will likely be a closed system — something Zuckerberg has, ironically, hit on as a vector of attack.
