Strange FTX Hack Upon Bankruptcy Finally Attracts US Feds

Someone mysteriously withdrew hundreds of millions of dollars in crypto from FTX wallets as it declared bankruptcy last month

article-image

FTX’s Sam Bankman-Fried | Exclusive art by Axel Rangel modified by Blockworks

share

The US Department of Justice (DOJ) is reportedly probing an apparent hack worth $372 million on crypto exchange FTX as it filed for bankruptcy on Nov 11.

Blockchain analytics unit Elliptic initially relayed that $663 million in various cryptocurrencies belonging to FTX was suspiciously on the move. Transfers worth $180 million turned out to be FTX sending funds into cold storage, while alleged hackers quickly swapped the remaining $477 million into ether and stablecoin DAI.

FTX CEO John Jay Ray III confirmed the hack the following day, and said the company was in contact with law enforcement regarding the matter. The value of crypto lost in the incident has since dropped to $372 million, per Bloomberg, which cites bankruptcy filings.

This latest probe is reportedly separate from existing fraud cases against former FTX CEO Sam Bankman-Fried. The DOJ investigation could send the hacker to prison for a maximum of 10 years if found guilty of as-yet hypothetical charges related to computer fraud.

Kraken’s chief security officer initially said the exchange was aware of the identity of the assailant, however later appeared to walk back those claims.

Bankman-Fried himself has also suggested in interviews that the hacker could be someone from within FTX, or someone who managed to install malware onto a former employee’s computer.

“I’ve narrowed it down to like eight people. I don’t know which one it was,” Bankman-Fried told YouTuber Tiffany Wong.

The disgraced entrepreneur, who is currently out on bail in California, was in charge of FTX when it reportedly funneled $10 billion in customer funds to affiliated trading unit Alameda Research over the years. Lawyers estimate FTX owes funds to up to one million users, with the largest 50 creditors out of pocket by some $3.1 billion.

Bankman-Fried now faces an eight-count federal indictment including wire and securities fraud charges. “This is one of the biggest financial frauds in American history,” US Attorney Damian Williams has said. 

Former FTX and Alameda executives Gary Wang and Caroline Ellison have both pleaded guilty to federal criminal charges, and are cooperating with authorities with further investigations.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (1).png

Research

Aave’s revenues have doubled from April lows and are fast approaching all-time highs. With 35% of borrow interest coming from ETH and 55% from stablecoins, Aave is emerging as a powerful proxy as an ETH and stablecoin beta. As looping strategies accelerate growth and Horizon positions the protocol to ride the RWA wave, Aave is shaping up as one of DeFi’s most compelling multi-narrative plays.

article-image

Season One of the DeFi Renaissance Incentive Program (DRIP) will distribute up to 24 million ARB to users

article-image

Ahead of the FOMC September meeting, the labor market continues to embolden a dovish lean

article-image

A TradFi veteran could be Solana’s best bet at finding its own Michael Saylor

article-image

The crypto infrastructure firm expands into payments with a stablecoin network connecting fintechs, banks, and issuers

by Blockworks /
article-image

Private testnet aims to deliver low-cost settlement with partners including Visa, Deutsche Bank, and OpenAI

by Blockworks /
article-image

Solana saw $78 million in REV for August