Not long after FTX filed for bankruptcy, the exchange suffered a cyber-attack that resulted in the theft of tokens worth $372 million. FTX witnessed abnormal outflows of tokens worth almost $700 million within a time frame of 24 hours. The intrusion was regarded as being the work of an external hacker. The rumour of FTX being looted by employees made the Commission step in and take control of digital assets worth $3.5 billion on November 12. These assets were seized shortly after the exchange filed for bankruptcy.
These assets will be held until the Bahamian Supreme Court instructs the Commission to hand them out to their rightful owners. Such a move could inevitably provide great relief to some customers of FTX. The current CEO of the exchange, John Ray, stated that there might be a chance of international customers losing their assets. The loss suffered by these customers would be greater than those of US-based customers.
Similarly, the US Department of Justice has also launched a criminal probe against stolen assets. The Commission mentioned that Bankman-Fried and Gary Wang had no access to the money seized. Furthermore, the Commission even mentioned that it didn’t instruct FTX to prioritize all possible withdrawals of clients in the Bahamas.
The Commission Talks About the Future of FTX
The Commission intends to continue its investigations into FTX. This investigation revolves primarily around the factors that led to the failure of the exchange. Such an investigation would be done based on the directions and the guidelines stated by the Supreme Court of Bahamas. Furthermore, collaboration with other supervisory authorities would be considered as well. The main goal is to safeguard the assets of FTX and protect the interests of both customers and creditors.
The $3.5 billion seized was transferred to digital wallets owned and controlled by the commission for safekeeping. It is a fact that some token protocols express the need to burn old tokens and mine new tokens simultaneously to affect the transfer. No such requirement was needed when the transfer was made. The Commission also mentioned that it aspires to promote customer protection and confidence.
