United States Regulators Launches Investigations into FTX Hack

With the crypto industry under the lens of regulators since the Terra/LUNA crash, investigations into the collapsed exchange FTX have now been launched. Following the FTX implosion, an unknown bad actor hacked the exchange and made away with about $372 million, according to the bankruptcy filing.

According to a Bloomberg report on Tuesday, United States Federal Prosecutors have opened an investigation into the hack to bring the hacker to book. However, the investigation by the federal prosecutors is different from the fraud case investigations on the collapsed exchange’s co-founder, Sam Bankman-Fried.

Interestingly, the authorities have been able to freeze a little amount from the stolen funds, which is nothing compared to what the hacker made away with. Although the hacker has been seeking means to redirect the assets without raising suspicion, the traceability of blockchain transactions has not permitted him.

It remains to be seen who this hacker is. Some believe that it may be an FTX executive, others think it may be a white hat hacker and a few others say it may be an unknown cybercriminal. However, if brought to book, the hacker will see up to 10 years in prison for several charges in relation to computer fraud.

With proper investigation, blockchain analytic firm Elliptic discovered that the tokens withdrawn from FTX wallets were swapped for Ethereum (ETH) and Bitcoin (BTC) via decentralized exchanges. Notably, this type of hack is majorly seen in large hacks.

Meanwhile, the money stolen by the hacker is a small fraction compared to what the bankrupt billionaire is currently accused of misusing. Hence, the need for federal prosecutors to go deeper into their investigations.

Crypto Industry Continues to Suffer Thefts

Relatively, the bankrupt exchange together with its former CEO has drastically caused disorderliness in the cryptocurrency industry at large. However, some other hacks have occurred in the past.

In October, FTX accounts that were connected to the trading bot platform 3Commas were attacked by hackers who made use of API keys. Users lost million of crypto funds including BTC, FTX tokens, and other cryptocurrencies.

Equally, the Solana-based Decentralized Finance (DeFi) platform Mango Markets also experienced an exploit of $116 million. The hackers made use of an oracle price manipulation to steal funds from the platform’s treasury.