SECTIONS

Funds vanish at bankrupt crypto firm FTX

An advertisement for Bitcoin cryptocurrency is displayed on a street in Hong Kong, on February 17, 2022. [AP Photo]

Collapsed cryptocurrency trading firm FTX confirmed there was “unauthorised access” to its accounts, hours after the company filed for Chapter 11 bankruptcy protection Friday.

The embattled company’s new CEO John Ray III said Saturday that FTX is switching off the ability to trade or withdraw funds and taking steps to secure customers’ assets, according to a tweet by FTX’s general counsel Ryne Miller.  FTX is also coordinating with law enforcement and regulators, the company said.

Exactly how much money is involved is unclear, but analytics firm Elliptic estimated Saturday that $477 million (Sh57.7 billion) was missing from the exchange.

Another $186 million (Sh22.6 billion) was moved out of FTX’s accounts, but that may have been FTX moving assets to storage, said Elliptic’s co-founder and chief scientist Tom Robinson. A debate formed on social media about whether the exchange was hacked or a company insider had stolen funds, a possibility that cryptocurrency analysts couldn’t rule out.

Until recently, FTX was one of the world’s largest cryptocurrency exchanges. It was already short billions of dollars when it sought bankruptcy protection Friday and its former CEO and founder, Sam Bankman-Fried, resigned. The company had valued its assets between $10 billion (Sh1.2 trillion) to $50 billion (Sh6 trillion), and listed more than 130 affiliated companies around the world, according to its bankruptcy filing.

The unraveling of the once-giant exchange is sending shockwaves through the industry, with firms that backed FTX writing down investments.