Nighttime on November 11, 2022, millions of dollars worth of cryptocurrencies were moved from wallets linked to embattled FTX in the absence of any official notice. This peaked the interest of many and sparked speculation that ranged from the initial posturing of an FTX bankruptcy to an active and on-going hack. [See, e.g. Sarkar, A. Tether blacklists $31.4M USDT following FTX’s alleged hack, Musk reacts. (Accessed November 12, 2022)].

But answers to this speculation came relatively quickly as FTX posted the following to Telegram:

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Following this FTX confirmation, proactively, Tether froze by blacklisting $31.4 million in Tether linked to the alleged hack transactions. Blockchain Investigator ZachXBT informed that the Tether so blacklisted was comprised of $3.9 million worth of USDT on Avalanche and $27.5 million worth of USDT on Solana.

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This proactive move by Tether in effect prohibits the ‘hackers’ from transferring these funds to other accounts or to exchanges to obtain other types of crypto. To effect a remedy, Tether could burn the blacklisted coins and reissue an equal amount to the pre-hack accounts. But the hacker stole more than just Tether. Also removed were other crypto assets most notably, Ethereum, Chainlink, and USDP. So far, these other crypto entities have not intervened in this situation.

In fact, more than $600 million worth of crypto has flowed out of FTX’s accounts. It has been confirmed by Foobar that an on-chain message to the recipient account contained the 4byte selector ‘0x3d24a1ff’ (hash for the ‘Rug Pull All’ function). This fact, coupled with the timing of this hack (vis-a-vis the bankruptcy filing) leads to the speculation that this was an inside job with the added motive to leak all private keys. [See e.g. Singh, V. FTX Hack: Over $600 Million Transferred Out Of FTX Wallets. (Accessed November 12, 2022)].

And if this is not enough to get you to shake your head, try this:

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It has yet to be confirmed as yet whether of not SBF is actually on that private jet… but under the circumstances it just adds to the drama of this situation. But … if so:

Table of Authorities

• Sarkar, A. Tether blacklists $31.4M USDT following FTX’s alleged hack, Musk reacts. (Accessed November 12, 2022)

• Singh, V. FTX Hack: Over $600 Million Transferred Out Of FTX Wallets. (Accessed November 12, 2022)