Lawyers claim that FTX assets are either stolen or missing, and a team of financial forensic experts is now attempting to follow the money trail.
The new management of the bankrupt crypto exchange FTX has reportedly hired a team of financial forensic investigators to locate billions of dollars in missing customer cryptocurrency.
According to a Dec. 7 Wall Street Journal report, financial advisory firm AlixPartners was chosen for the task and is led by former Securities and Exchange Commission (SEC) chief accountant Matt Jacques.
The forensics firm is expected to be tasked with “asset-tracing” to identify and recover the missing digital assets, in addition to the restructuring work being done by FTX.
On November 11, hackers stole over $450 million in assets from FTX and FTX.US wallets.
Former CEO Sam Bankman-Fried claimed in an interview with crypto blogger Tiffany Fong on Nov. 16 that he was close to identifying the hacker and that he had “narrowed it down to eight people,” believing it was “either an ex-employee or somewhere malware was installed on an ex-computer.” employee’s
On November 22, a lawyer representing FTX debtors stated that “a substantial amount of assets have either been stolen or are missing” from FTX, and revealed that blockchain analytics firms such as Chainalysis had been enlisted to assist as part of the proceedings.
The stolen funds from FTX have since been moving through various crypto mixers and exchanges in order to be laundered.
On November 20, the hacker transferred their Ether (ETH) holdings to a new wallet address and then exchanged some of the ETH for an ERC-20 version of Bitcoin, bridging the funds to the BTC network.
They then used a technique known as peel chaining, which divides the holdings into increasingly smaller amounts across multiple wallets, and sent the BTC through a crypto mixer before transferring it to the OKX exchange on November 29.
On Nov. 21, the hacker attempted more peel chaining by dividing 180,000 ETH among 12 newly created wallets.
Former CEO Sam Bankman-Fried has previously claimed that customer funds at FTX and its sister trading firm Alameda Research were “unknowingly commingled” with customer funds at FTX loaned to Alameda.
In his initial bankruptcy filing, FTX’s new CEO and chief restructuring officer, John Ray III, was scathing, saying that “never” in his 40-year career had he “seen such a complete failure of corporate controls.”
He claimed that Bankman-Fried and his closest colleagues were “potentially compromised” and that they used “software to conceal the misuse of customer funds.”
