US Department of Justice has launched an investigation into $372 million FTX exchange hack
- US Department of Justice launched an investigation into the mysterious hack on the bankrupt FTX exchange.
- The criminal investigation by federal prosecutors will dive deeper into the hacking incident and determine whether the exploit was an inside job.
- The FTX contagion has disrupted the crypto ecosystem and urged regulators to work on their crypto regulation framework.
US Department of Justice is investigating the mystery hack that hit the collapsed FTX exchange. After FTX was hit by a liquidity crisis, the exchange was the target of an exploit and $372 million in cryptocurrencies was siphoned off the exchange. An investigation by federal prosecutors can help determine whether the event was an inside job.
Also read: Bitcoin whale activity signals possibility of a historic bull run in BTC if this occurs
US Department of Justice investigates FTX exchange hack
US Department of Justice, a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice, has started an investigation into the $372 million FTX hack. Shortly after the bankrupt exchange’s native token FTT plummeted from $22 to $2, the news of misappropriated user funds and insolvency made headlines.
The collapse of Samuel Bankman-Fried’s FTX exchange sent shockwaves through the crypto ecosystem. The exchange was valued at $32 billion at one point in time, and now it is bankrupt. Despite the fallout, there are traces of transactions and reports that stolen funds were laundered into Bitcoin and Ethereum.
The Department of Justice launched an investigation into the abnormal FTX hack to uncover the traces of transactions and reports associated with the event. Reports revealed that stolen crypto assets were laundered into Bitcoin and Ethereum.
The criminal probe into stolen assets is separate from the fraud charges brought against Samuel Bankman-Fried, FTX’s co-founder. A source close to the matter confirmed that US authorities have frozen stolen funds, though it represents only a fraction of the entire exploit.
The day the estate filed for bankruptcy it was hit by the exploit. The new FTX CEO referred to the incident as “unauthorized access” to the exchange’s assets.
A blockchain analytics firm Elliptic traced the path that the assets took on-chain and concluded that drained funds from FTX wallets were swapped for Ethereum through decentralized crypto exchanges. The investigation revealed that the tactics deployed were the ones that are fairly common in large hacks.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
