- Kraken has frozen the accounts of several FTX and Alameda Research executives
- The move follows the theft of some $477 million worth of tokens from the exchange
- An inside job was already suspected to have been the means of the funds being taken
Kraken has frozen the accounts of some FTX and Alameda Research executives after suspecting them of being involved in the theft of hundreds of millions of dollars in cryptocurrencies from FTX over the weekend. The exchange tweeted yesterday that it had taken the action “to protect their creditors” and had contacted law enforcement, backing up the notion that the theft was an inside job.
$477 Million Stolen
The crypto space woke on Saturday morning to find yet another twist in the FTX saga, with FTX’s wallets drained of more than $663 million in various tokens, of which $477 million is suspected to have been stolen. The remainder is believed to have been moved into secure storage by FTX themselves, suggesting that someone took advantage of the move to siphon the funds into their own wallets.
This was picked up by blockchain analysis firm Elliptic, which noted several elements to the compromise:
- $278m on Ethereum
- $106m on Solana
- $89m on BSC
- $4m on Avalanche
- Over $220 million swapped for ETH or DAI through decentralized exchanges
The fact that these moves were carried out right when FTX was in the process of moving funds to cold wallets as dictated by the court appointed CEO John Ray III suggested that an inside job by staff was a more likely route than an outside hack.
Kraken Links Accounts to “Fraud, Negligence or Misconduct”
This theory seems to have been backed up by Kraken, which on Saturday tweeted that it knew the identity of the hacker (a tweet that has since seems to have been deleted) and added on Sunday that it had taken action to lock the accounts concerned:
Kraken has spoken with law enforcement regarding a handful of accounts owned by the bankrupt FTX Group, Alameda Research and their executives. Those accounts have been frozen to protect their creditors.
Other Kraken clients are not affected. Kraken maintains full reserves.
— Kraken Exchange (@krakenfx) November 13, 2022
The exchange then confirmed to Cointelegraph that it had “actively monitored recent developments with the FTX estate” and was “in contact with law enforcement”, adding that it took action against the accounts in question because it suspected them to be “associated with ‘fraud, negligence or misconduct’ related to FTX.”
If the funds aren’t able to be recovered this will present another huge blow to FTX users, who already knew that the company had only $900 million with which to repay its $9 billion in liabilities.
