Pig on the beach in the bahamas.

FTX Hack: Was the Bahamas Government Responsible?

3 min read

This article is for general information purposes only and isn’t intended to be financial product advice. You should always obtain your own independent advice before making any financial decisions. The Chainsaw and its contributors aren’t liable for any decisions based on this content.



FTX Hack: A recent tweet from blockchain analytics firm Chainalysis has shown that the enormous amount of Ethereum (ETH) stolen in the infamous FTX hack is currently being transferred into Bitcoin (BTC) as the mysterious hacker looks to offload their ill-gotten gains.

Who’s really behind the FTX hack?

In the midst of FTX collapsing and suddenly declaring bankruptcy, news broke that US$663 million in funds had been moved out of FTX’s main wallets. Blockchain analytics unit Elliptic clarified that US$186 million was sent to FTX personnel tasked with securing compromised funds. However, the remaining US$447 million in digital assets were labelled as “unauthorised transfers”.

The most significant amount of these unauthorised transfers was conducted by an anonymous hacker who stole 228,523 ETH from the exchange. This amount of Ethereum (ETH) — which was valued at a hefty US$268 million at the time — saw the owner become the 35th largest holder of Ethereum in the world. 

Rumours about who the actor could be have changed as conflicting evidence continues to emerge. Initially it was widely accepted that it was in fact a hack, however a Thursday press release from the Securities Commission of the Bahamas reignited the possibility that the “hacker” was actually Sam Bankman-Fried moving the assets under the command of the authorities. 

In the press release, The Bahamas Securities Commission announced that it had actually assumed control of assets belonging to FTX Digital Markets, but had to keep it under wraps to protect FTX customers. 

It went on: “Urgent interim regulatory action was necessary to protect the interests of clients and creditors of FTX Digital Markets.” 

November 17 Media release from the Bahamas Securities Commission. 

The former CEO of FTX, Sam Bankman-Fried addressed the incident in a recent Twitter interview with Vox journalist Kelsey Piper, saying that the hacker was either a disgruntled employee or a nefarious actor who had somehow gained access to an employee’s computer. 

Chainalysis confirms Bahamas not responsible for the ETH hack

In light of all this finger pointing and rumour milling, Chainalysis has now confirmed that FTX was indeed hacked. 

A new tweet shows that some of the total US$660 million in funds moved from FTX were most certainly transferred to wallets associated with regulators.

“Reports that the funds stolen from FTX were actually sent to the Securities Commission of The Bahamas are incorrect. Some funds were stolen, and other funds were sent to the regulators,” read the recent tweet from Chainalysis. 

How the hacker has moved the funds. Via Twitter.

“Funds were bridged from ETH to BTC, likely to be mixed prior to a cash out attempt. You can see this morning’s movements in Reactor,” added Chainalysis.

The FTX crisis has made things incredibly difficult for crypto investors. At the retail level, hundreds of thousands of everyday people remain unable to access the funds they had stored on the FTX exchange. At the institutional level, the financial contagion from the world’s fourth largest crypto exchange going belly-up has rapidly spread into the broader crypto market.

Almost every firm with significant exposure to FTX has struggled to keep their heads above water, with numerous cryptocurrency lenders and exchanges being forced to halt withdrawals as a result.

Now, Genesis Global, one of the largest cryptocurrency lending institutions in the industry has been revealed to be in desperate need of financial aid, sending tremors of uncertainty rumbling through the crypto economy.