U.S. Department of Justice Investigates Missing FTX Digital Assets

Overview of the Investigation

The U.S. Department of Justice is actively investigating the disappearance of approximately $372 million in digital assets from the defunct cryptocurrency exchanges FTX and FTX US. This probe follows the exchanges' internal collapse and bankruptcy proceedings.

Abnormal Wallet Activities

On November 12, following the bankruptcy announcement, FTX alerted its customers to suspicious wallet activities. At least 228,523 Ether (ETH) was transferred from the exchange by an unidentified actor. These transactions occurred on the night of November 11, coinciding with the company's bankruptcy filing.

Unauthorized Crypto Transfers

FTX US' general counsel confirmed that these transfers were unauthorized. In response, the subsidiary moved all its crypto assets to cold wallets as a security measure. These actions were taken to safeguard the remaining digital assets amid the unfolding crisis.

Forensic Analysis of Transfers

Blockchain forensics firm Elliptic reported that the total unauthorized transfers amounted to $477 million. The perpetrator converted the stolen Ether into RenBTC. This conversion was followed by bridging to Bitcoin via the RenBridge service. This method has been implicated in laundering significant amounts of cryptocurrency.

Connection to Alameda Research

Ren, the service used for converting and moving the stolen assets, was linked to Alameda Research, a hedge fund associated with FTX. Allegations have surfaced suggesting that Ren has been used to launder hundreds of millions in crypto, further complicating the case.

The ongoing investigation by the Department of Justice aims to unravel this complex web of unauthorized transactions and secure the missing assets.