FTX Freeze Customers Accounts on Account of Kroll’s Breach

Beleaguered cryptocurrency exchange FTX has frozen customers’ accounts temporarily as a precautionary measure after the breach that affected its claims agent Kroll Restructuring Administration LLC.

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The breach led to the exposure of non-sensitive claimant’s data on the Kroll system, but FTX made the decision to suspend affected users’ accounts to avoid additional damage or a recurrence.

Also, users have been advised against making any changes to their claims or altering the accepted schedules as a result of the incident. All claims data filed on Kroll’s customer claims portal is intact on the claims register and remains valid. 

FTX Claims Agent Kroll Suffers Breach

Kroll Restructuring Administration was appointed as FTX claims and noticing agent on November 12th, 2022 for its ongoing bankruptcy proceedings. Its system was breached recently and non-sensitive customer data of specific claimants linked to the bankruptcy case was exposed. 

However, FTX claimed that accounts password and other sensitive data were not compromised in the breach. 

Breached or Not?

Kroll has assured its users and the public that it has the situation under control. FTX confirmed that Kroll is “notifying affected individuals directly with measures that customers can take to protect themselves. FTX account passwords were not maintained by Kroll, and FTX’s own systems were not affected.”

It is worth noting that blockchain sleuth ZachXBT has verified that some FTX users have begun to receive phishing emails and this further confirms that their personal data was compromised. Nonetheless, users are advised to remain vigilant and very cautious about third-party links.

FTX Seeks to Exempt FTX Dubai From Bankruptcy 

Meanwhile, the FTX bankruptcy case is proceeding rapidly and in a recent report, the defunct exchange asked that its Dubai arm be excluded from the bankruptcy restructuring process taking place in the United States. FTX had previously contended that FTX Dubai did not conduct any operation prior to the bankruptcy filing, hence, it is unlikely to relaunch. 

Furthermore, since FTX Dubai has a solvent balance sheet, a voluntary “liquidation procedure in accordance with the laws of the United Arab Emirates would allow a timely distribution of the positive cash balance after payment of all outstanding liabilities and liquidation of all assets,” FTX commented.

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