US Department of Justice launches investigation into stolen money FTX

Last Updated: 19 January 2023

The drama surrounding the fall of the famous crypto exchange FTX is not exactly easing. About $370 million worth of crypto funds disappeared just after the bankruptcy was filed, according to several prosecutors.

Stolen funds

These stories in themselves are nothing new. However, officers are currently conducting official investigations into the matter. They have been hired by the Department of Justice (DOJ), which has frozen several account balances to ensure that this too is not captured.

Blockchain analytics company Elliptic announced two months ago that FTX’s stolen funds were exchanged for altcoins on decentralised exchanges fairly soon after the hack. Here, there is usually no Know-Your-Customer (KYC) procedure built in. This allows you to hustle digital money anonymously.

Other parts went through mixers to disguise the origin of the currency. In this way, the hacker hopes to prevent authorities from tracking the flow of money. So despite this, the Ministry of Justice is now putting a team of investigators on the incident.

Access to systems

The new CEO of FTX, John Ray III, states that those involved with the company had unauthorised access to its systems for about 24 hours prior to the bankruptcy filing. It is expected that this is what went wrong(by).

The investigation into the stolen funds is separate from the charges SBF is currently facing. Some claim that the theft may have been an inside job. No significant evidence has been found to support this claim.

The person convicted of the theft is likely to be charged with computer fraud, which currently carries a maximum sentence of around 10 years.

  • Ivan Brightly

    Ivan Brightly is a leading cryptocurrency analyst and author with over 5 years of experience in the blockchain and digital asset space. He previously served as a senior analyst at a major cryptocurrency hedge fund where he led quantitative research and trading strategy development.

    Ivan holds a Master's degree in Finance from the London School of Economics and a Bachelor's in Computer Science from Stanford University. He is frequently invited to speak at fintech and blockchain conferences worldwide on topics spanning cryptocurrency trading, blockchain technology, and the future of digital assets.

    Ivan's commentary has been featured in several major finance and technology publications including Forbes, Bloomberg, and CoinDesk. He is considered one of the most insightful voices analyzing new developments in the cryptocurrency and blockchain industry.

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