FTX user hit by million dollar loss overnight, lost hundreds of Ethereum tokens, Bitcoin

Colin Wu, a Chinese journalist received a report of an FTX account hack. A user lost more than 10 Bitcoins, hundreds of Ethereum tokens and thousands of FTT in five thousand transactions overnight. 

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Chinese user losses hundreds of Ethereum tokens overnight

On October 21, a Chinese user informed journalist Colin Wu that his FTX account suddenly was hit by DMG Pair’s contra trade. Traders trading DMG pairs (DMM Governance) on FTX were affected. In 5,000 transactions the users’ account was emptied of $1.6 million. 

The user started using the robot a year ago and the FTX API did not need to be updated so it was saved. This gave the 3Commas bot access to contra trade. FTX exchange users hit by this event were users of quantitative robot for trading on the platform. 

The trading bot 3Commas powered these transactions through contra trade. Contra trade means transactions that involve buying or selling any number of listed digital assets and within six months of trading or transacting, entering in an opposite transaction. 

The user’s account was emptied, close to zero and contra trade resulted in a loss of ten Bitcoin tokens, hundreds of Ethereum tokens and thousands of FTT. FTX exchange commented on the event stating that the platform needs a notice to freeze a user’s account, once a user submits a report, a receipt is generated. 

3Commas assured users there was no leak. The source of the contra trade exploit is still being deduced by proponents and analysts. 

Sam-Bankman Fried, the CEO of FTX exchange said that the exchange will hand out $6 million to victims of the DMG trading pair exploit, making traders on the exchange whole.