Who’s Behind the $400 Million FTX Hack? Truth Revealed

Three individuals are facing charges related to orchestrating a SIM-swapping scam that drained over $400 million from FTX following the exchange’s bankruptcy filing in November 2022. The attack occurred shortly after FTX’s founder, Sam Bankman-Fried, resigned.

The SIM-Swapping Operation

The Department of Justice charged Robert Powell, Emily Hernandez, and Carter Rohn with participating in a SIM-swapping ring that targeted FTX and other individuals over two years. 

The trio from Illinois, Colorado, and Indiana, respectively, collected personal data from around 50 victims, convincing cell phone providers to transfer victims’ phone numbers to their control. This allowed them to intercept text messages, including multi-factor authentication codes, gaining access to victims’ financial accounts and crypto wallets.

While the indictment does not name FTX explicitly, individuals familiar with the case confirmed it was “victim company-1” in the court filings. The lax security at FTX made it an attractive target for SIM-swapping attacks.

Regulatory Scrutiny 

FTX’s recent bankruptcy filing has brought to light vulnerabilities, raising concerns about regulatory risks surrounding stablecoin issuers. JPMorgan analysts highlighted Tether’s risk, citing transparency and compliance issues. Regulatory scrutiny worldwide poses challenges, but stablecoin issuers adhering to regulations may gain market share.

FTX assured customers and creditors of a potential full recovery of their funds, provided they can prove their losses. The compensation plan involves assessing cryptocurrency prices from November 2022. FTX, however, clarified it has no plans to restart operations.

FTX’s native token, FTT, experienced volatility following the announcement. Initially surging by over 11%, it faced a 15% downturn. Market uncertainty revolves around FTX’s future, especially with its ex-CEO Bankman Fried in imprisonment awaiting final sentencing.

In Conclusion, 

FTX faced a massive challenge with over 36,000 claims totaling around $16 billion. Last year, they were unsure if they could pay back everyone, thinking it might only be about 90% of the customers. But now, FTX is more positive. They believe they have enough money to pay all the valid claims from customers and creditors.

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