FTX Addresses the Cyber Incident and Then Continues the Claims Process

Published on:

Last Updated on September 18, 2023 by Bitfinsider

After a cyberattack, the bankrupt cryptocurrency exchange FTX strengthened the security of its customer claims system. Because of this, claimants are now able to keep making claims for assets that were held on the exchange prior to its insolvency.

Kroll, FTX’s designated bankruptcy claims agent, was the target of the intrusion, which did not impact any of its systems. For certain claims, the hack revealed non-sensitive client data; however, FTX emphasises that payments and account passwords are untouched.

In order to pursue the claims process for digital assets held on the platform before its declaration of bankruptcy in November 2022, account holders can now access their accounts. This pertains to anyone who had accounts with Blockfolio, FTX EU, FTX Japan, FTX, FTX, FTX.US, and Liquid.

About 36,075 customer claims totaling $16 billion had been filed against FTX and FTX.US as of September 11; 10% of these claims had been granted. Furthermore, 2,300 non-customer claims—including those from Genesis, Celsius, and Voyager—with a combined total value of $65 billion had been submitted.

FTX clarified that the accounts had been frozen as a preventive measure. It also mentioned that since then, it has installed more security measures. The exchange acted in response to multiple complaints that have been made recently regarding the claims portal.

On July 11th, FTX opened the customer claims portal. However, an hour after it launched, it mysteriously went offline.

After learning of the cybersecurity incident against Kroll, FTX temporarily froze accounts for impacted users who used its claims system on August 27. Users could still send in proofs of claim by mail or using Kroll’s online customer form, even after the suspension.

The sale of FTX’s digital assets was just approved by the U.S. Bankruptcy Court for the District of Delaware, which is another relevant development. On September 13, Judge John Dorsey rendered a decision allowing FTX to sell assets through an investment adviser in weekly batches, subject to stringent guidelines.

The first week’s restriction is $50 million, while the next few weeks’ cap is $100 million. After giving committees and the U.S. trustee ten days’ notice, FTX is still not allowed to sell its Bitcoin (BTC), Ethereum (ETH), and “certain insider-affiliated tokens” without a separate ruling.

Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.