Bankruptcy Counsel Reveals FTX Assets at Risk of Cyberattacks

UTC by Ibukun Ogundare · 3 min read
Bankruptcy Counsel Reveals FTX Assets at Risk of Cyberattacks
Photo: Depositphotos

In addition to the cyberattacks report, the attorney said several legal, cybersecurity, and blockchain analysis firms had come together to help FTX with the proceedings.

Like FTX has not seen the worst days, the crypto company is now at risk of cyberattacks following its crash. The latest on the distressed company after filing bankruptcy in the US is the risk of possible cyberattacks. According to James Bromley of the law firm Sullivan & Cromwell, FTX assets are at risk from hackers. Notably, the law firm represents debtors in the ongoing bankruptcy case of the crypto company.

FTX at Risks of Cyberattacks

Bromley spoke about the company’s new core objectives in a live stream of FTX Trading’s bankruptcy proceedings on the 22nd of November. He said that CEO John Ray III is focused on saving what is remaining of the exchange with its remaining employees and funds. While a group of employees is working on keeping FTX assets and records safe, hackers are also keen on stealing from the company. Blockchain analysis company Chainalysis reported that hackers converted the ETH stolen from FTX into BTC. The analysis firm also added that exchanges should freeze these assets to prevent criminals from converting cryptocurrencies into fiat. The actors got away with 228,523 ETH from the exchange. With the crypto worth around $268 million, the crypto ownership makes the thief one of the world’s largest holders of ETH.

The theory was that the funds in question could be with the securities regulators in the Bahamas. Chainalysis opposed the news, saying “some funds were stolen, and other funds were sent to the regulators.”

According to Bromley, FTX assets, including crypto and information, are at risk of cyberattacks. He explained:

“We’re not just talking about crypto assets, or cash assets, or physical assets 0 we’re also talking about information and information here is an asset. Unfortunately, […] a substantial amount of assets have either been stolen or are missing. We are suffering from cyberattacks, both on the petition date and the days following, and we have, as I mentioned earlier, engaged sophisticated expertise to protect against the hacks, but they continue.”

FTX’s Proceedings

In addition to the cyberattacks report, the attorney said several legal, cybersecurity, and blockchain analysis firms had come together to help FTX with the proceedings. He also mentioned a cybersecurity firm involved in the case. However, Bromely did not disclose the specific firm for security reasons.

The new FTX CEO criticized SBF’s public comments on the crash. The new executive, focusing on reorganizing the distressed firm, said that the exchange was “in the control of a small group of inexperienced and unsophisticated individuals.” He added that some of these individuals have also been compromised.

“At the same time of the run on the bank, there was a leadership crisis. The FTX companies were controlled by a very small group of people led by Sam Bankman-Fried. During the run on the bank, Mr. Bankman-Fried’s leadership frayed, and that led to resignations throughout the ranks,” explained he.

Altcoin News, Bitcoin News, Cryptocurrency news, Ethereum News, News
Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

WhaleMaker
Related Articles
WhaleMaker