Tough week for FTX: after seeing its token plummet following the position taken by the CEO of Binance against it, the platform is now officially bankrupt. And as if that weren’t enough, a senior company executive has just alerted users that their funds may be at risk. Ryne Miller, in a tweet published this weekend, explains that all the resources in cryptocurrencies held by FTX have been moved to a cold wallet. Either a more secure storage solution, in order to avoid suffering a supposed hack.
The concerns are confirmed when we also know that the same leader, having access to the Telegram customer service channel, pinned a message there inviting Internet users to delete the FTX app from their mobile. It can be read in black on white that “FTX has been hacked” and that the “FTX apps are malware“. The same recommendation is made with regard to the official FTX site, which allegedly hosts Trojans. So beware: if you still have some funds on the exchange, it’s probably too late to recover them.
Following the Chapter 11 bankruptcy filings – FTX US and FTX [dot] com initiated precautionary steps to move all digital assets to cold storage. Process was expedited this evening unauthorized – to mitigate damage upon observing transactions.
—Ryne Miller (@_Ryne_Miller) November 12, 2022
More than suspicious transactions in the viewfinder
It is difficult to know precisely what is going on internally, nevertheless the press is already mentioning the case of $600 million evaporated just a few hours after the announcement of FTX’s bankruptcy. Among these large-scale movements, some would have proven to be compromised, without it being known exactly what amounts are concerned. However, there is strong reason to believe that a large majority of these volumes simply concern users who prefer to flee and put their wallets in a safe place to avoid a debacle.
According to an article published by our colleagues from CoinDesk, many registrants on the Sam Bankman-Fried platform have seen their account balance display… 0. Especially in the United States. The downed FTX API could be the source of the problem, but sums have also been sent to DeFi in large quantities, which can -in theory- turn out to be a bad omen. Another hypothesis remains the placement in a safe place, on the contrary therefore.
What to do ?
All this brings us to a single question: how to protect yourself well? For funds hosted on FTX, you will have understood: the damage is done. You should not try to recover them at the risk of seeing perhaps corrupted processes infect other wallets that have been well defended so far. But for the future, some prerequisites are naturally necessary. To begin with, it is of course diversify your skills : You don’t put all your eggs in one basket.
With this, the creation of a cold wallet, as suggested by Miller, is also an alternative of choice to limit the harmful consequences of crashes such as the one today. Finally, always think carefully about your investment: entrusting your savings to a platform that has bet everything on its own token is not always the wisest…