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It has been reported that FTX moved $500 million worth of cryptocurrency onto a USB stick in order to prevent hackers from stealing it


Table of Contents
    • Hackers stole millions of dollars of crypto from FTX after the company declared bankruptcy. 
    • At the time, the company transferred $500 million onto a USB drive to safeguard it, per Wired.
    • FTX dramatically imploded late last year. CEO Sam Bankman-Fried is on trial over fraud charges.

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    FTX employees reportedly scrambled to stop hackers from making off with $1.1 billion in crypto as the crypto exchange went into meltdown late last year.

    According to a report from Wired, FTX adviser Kumanan Ramanathan held as much as $500 million worth of assets on a USB drive for several hours to protect it from hackers.

    Unnamed sources told Wired that Kumanan then hunkered down in his office with FTX general counsel Ryne Miller to safeguard the USB in the early hours of the morning after FTX declared bankruptcy.

    At some point between 2 a.m. and 5 a.m., the pair called 911 to request police protection, over fears the hack was coming from the inside and that the thieves might try and physically steal the storage device.

    The hackers ultimately made off with around $415 million worth of crypto assets, a figure confirmed by FTX's bankruptcy lawyers earlier this year.

    Staff at FTX first became aware of the hack on the evening of November 11 but were unable to stop it as only Sam Bankman-Fried and his trusted lieutenants knew how to control the crypto wallets being drained.

    Sam Bankman-Fried stepped down as CEO of FTX that day and did not appear in the crisis virtual meeting employees convened to address the hack, per Wired.

    Executives at the collapsing crypto exchange scrambled to track down and move FTX's remaining funds into secure offline "cold storage" wallets managed by digital asset trust company BitGo.

    "They were scrubbing various systems trying to find where various private keys were, where assets were held," an anonymous former FTX employee told Wired. "It was just chaos."

    FTX's security failures have been well documented since the crypto exchange collapsed last year.

    Bankman-Fried is currently on trial over his role in FTX's demise and has pleaded not guilty to seven charges including wire fraud and conspiracy to commit money laundering.

    The FTX debtors, who are handling the bankruptcy estate, declined to comment when contacted by Insider.

    Sources


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