FTX confirms 'unauthorized transactions' as $1B in crypto reportedly vanishes

Cryptocurrency exchange FTX, which filed for bankruptcy Friday, transfers funds to offline storage after 'abnormalities'.

By  | FOXBusiness

Embattled cryptocurrency exchange FTX said Saturday that it was moving funds into offline storage after reporting "unauthorized transactions."

Analysts said millions of dollars worth of assets had been withdrawn from the platform. 

"Following the Chapter 11 bankruptcy filings – FTX US and FTX [dot] com initiated precautionary steps to move all digital assets to cold storage. Process was expedited this evening – to mitigate damage upon observing unauthorized transactions," FTX U.S. general counsel Ryne Miller tweeted.

Cold storage refers to crypto wallets that are not connected to the internet to guard against hackers.

Miller had previously written that FTX was "investigating abnormalities with wallet movements related to consolidation of FTX balances across exchanges," although noting that facts were unclear "as other movements [were] not clear."

An administrator in the official FTX Telegram channel wrote that "Ftx has been hacked."

That administrator told users not to visit the FTX site "as it might download Trojans."

This illustration photo shows a smartphone screen displaying the logo of FTX, the crypto exchange platform, with a screen showing the FTX website in the background in Arlington, Virginia, on Feb. 10, 2022.  (OLIVIER DOULIERY/AFP via Getty Images / Getty Images).

Coindesk reports that the message was pinned by Miller.

FTX did not immediately return FOX Business' request for comment on the matter.

Figures from the Singapore-based analytics firm Nansen showed a one-day net outflow from FTX of about $266 million, with $73 million withdrawn from FTX U.S.

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, Aug 17, 2022.  (Jeenah Moon/Bloomberg via Getty Images / Getty Images).

Reuters, citing two people familiar with the matter, reported that at least $1 billion of customer funds had disappeared and that people told the news outlet that Bankman-Fried had secretly transferred $10 billion of customer funds from FTX to his trading company Alameda Research.

Two sources told Reuters that Bankman-Fried – in a meeting he confirmed took place – shared records with other senior executives that revealed the financial hole.

Spreadsheets reportedly showed that between $1 to $2 billion dollars of the funds were not accounted for among Alameda's assets and that the spreadsheets did not indicate where the money was moved.

In text messages to Reuters, Bankman-Fried said he "disagreed with the characterization" of the $10 billion transfer.

"We didn't secretly transfer," he said. "We had confusing internal labeling and misread it." 

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