Was FTX hacked? Deep dive reveals “backdoor” built into accounting software

It was confirmed late Friday night that a total of about $10 billion was transferred from FTX to Alameda Research by FTX founder Sam Bankman-Fried (SBF).

Hacking speculation steadily emerged after several unusual wallet transactions were highlighted. This shows that his $1 billion to his $2 billion in client funds are missing. When SBF was questioned about the $1 billion he lost and the $2 billion he lost, his response was “???”.

process numbers

FTX wallet addresses have received a total of $105.3 million worth of Ethereum, Solana, and BNB tokens from international and US-based wallets since 9:20 ET on November 11, confirming blockchain transactions was shown.

Maintaining a Twitter thread that fully documented the ongoing deal at the time, Foobar publicly tracked the cash flow as it occurred.

After Tether blacklisted USDT, FTX Wallet swapped $16 million USDT into DAI through decentralized exchange 1 inch. After that, the address he approved USDT, LINK, sETH and then sold USDT and sETH.

As the crypto community continued to track the outflow and inflow of wallet transactions, we also found that the wallet approved $24 million worth of LINK on CowSwap. Additionally, the same wallet bought millions of dollars on his LIDO, according to on-chain data.

Hacking or insider work?

FTX US general counsel Ryne Miller claimed that FTX US and FTX.Com moved all digital assets to cold storage after filing for Chapter 11 bankruptcy. Miller added that the process has been sped up to mitigate the damage of the observed fraudulent transactions.

Two hours later, the Bitcoin Archive tweeted a bulletin stating that “FTX has a ‘backdoor’ built into its accounting software by SBF.” This route was used to move billions of dollars in assets without alerting staff or external auditors.

A “backdoor” was established using custom-built software to give SBF the ability to execute commands and change the company’s financial records without informing anyone.

Additionally, using this “backdoor” to move $10 billion to Alameda avoided causing both accounting red flags and internal compliance.

Potential legal implications

FTX is under investigation by the US Securities and Exchange Commission (SEC) regarding its management and handling of client funds. With this latest development, FTX has more questions to answer as it comes under scrutiny around an SEC investigation.

FTX announced Friday evening that renowned restructuring expert John J. Ray III will take over management of the company. Ray III handled the liquidation of his Enron Corp, a company on record as one of the world’s largest bankruptcies.

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