Multiple news agencies are reporting that least $1bn in investor assets is likely to be missing at FTX “amid the fallout of the implosion.”
According to two anonymous sources who held senior positions at FTX, Reuters reports, some $1bn in client funds were missing at the once second-largest cryptocurrency exchange company. “The sources claimed the funds were part of $10bn in client funds that the FTX founder, Sam Bankman-Fried, secretly transferred to Alameda Research, the hedge fund he owns,” Lauren Aratani says.
Reacting to the matter, the Wall Street Journal says, “it appears hackers had actually taken $370m.” FTX’s US general counsel Ryne Miller said in a tweet on Saturday “that the company had detected unauthorized transactions and that it had moved all digital assets to cold storage, or offline, as a precaution.”
On the other hand, Elliptic, a cryptocurrency analytics and compliance firm, estimates that $473m in crypto assets were stolen from FTX last Friday night. The exact amount that was reportedly lost has however not been corroborated.
U.S treasury secretary, Janet Yellen, in an interview published by Bloomberg on Saturday, said the fiasco confirmed her view that cryptocurrency needs “very careful regulation”.
While noting that WITH regulated exchanges customer assets are segregated, Yellen said the development shows the weakness of this entire cryptocurrency sector. “The notion that you could use the deposits of customers of an exchange and lend them to a separate enterprise that you control to do leveraged, risky investments – that wouldn’t be something that’s allowed,” she said.
In addition, she added that: “At least it’s not deeply integrated with our banking sector and, at this point, doesn’t pose broader threats to financial stability.”