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As the US authorities continue their investigation into the sudden collapse of major crypto exchange FTX, federal prosecutors are probing an alleged hack that allowed cyber criminals to steal assets worth more than $370 million from the platform hours after it filed for bankruptcy.
The US Department of Justice has kicked off a criminal probe into the cyber theft, separating it from the fraud case centered around FTX’s disgraced co-founder and potential author Sam Bankman-Fried, a person familiar with the case who requested not to be named told Bloomberg.
The available data suggests that criminals left behind traces of transactions, and the stolen assets that were siphoned from the exchange were laundered into bitcoin (BTC) and ethereum (ETH).
After the theft was discovered by the US authorities, they succeeded in freezing some of the stolen assets, according to the unnamed source. This said, the frozen funds only represent a small share of the entire loot.
Should the authorities manage to get hold of the hacker, they could be charged with perpetrating computer fraud and face up to 10 years in prison.
Once the world’s third-largest crypto exchange, FTX filed for bankruptcy on November 11. Following this, it was revealed that the platform was plagued with a $9.4 billion hole resulting from fund mismanagement. Earlier this month, Bankman-Fried was arrested in The Bahamas after American prosecutors formally pressed charges against him, and the entrepreneur was eventually extradited to the US to face a number of criminal charges. He was released from jail last week after posting a $250 million bond, but is currently held under house arrest at the Bankman-Fried family residence in Palo Alto, California.
The Southern District of New York is investigating the disgraced crypto boss and the collapse of FTX and its sister trading firm Alameda Research. Bankman-Fried has been indicted on eight criminal charges which include wire fraud and conspiracy by misusing customer funds. In addition to this, the US Securities and Exchange Commission (SEC) charged the entrepreneur with “orchestrating a scheme to defraud equity investors in FTX.”
“One month ago, FTX collapsed, causing billions of dollars in losses to its customers, lenders, and investors. Now, a federal grand jury in New York has indicted the former founder and chief executive officer of FTX and charged him with crimes related to the phenomenal downfall of that one-time cryptocurrency exchange, including fraud on customers, investors, lenders, and our campaign finance system,” U.S. Attorney Damian Williams said in a December 13 statement released by the DoJ.
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