FTX swiftly restores claims portal after cyber breach, enhancing security and creditor protection for a new chapter.
Following a significant cybersecurity breach, FTX has restored its claims portal. The incident targeted Kroll, FTX’s third-party agent handling creditor claims. However, FTX was swift in its response by freezing affected user accounts as a precautionary measure, ensuring customer security.
Interestingly, the breach stemmed from a “SIM swapping” attack. This attack led to unauthorized access to files containing BlockFi, FTX, and Genesis claimant details. Despite this unsettling revelation, Kroll assured that neither FTX passwords nor KYC data were compromised.
Moreover, FTX has made clear its intentions to bolster security. With the portal now fully operational, FTX has confirmed the incorporation of additional security protocols. Hence, users can now navigate the platform with added confidence.
Judge Greenlights Crypto Sales
Besides the security enhancements, the recent approval by Delaware District Judge John Dorsey has been in the spotlight. This move allows FTX to sell off a significant portion of its cryptocurrency, estimated in the billions, to repay its creditors.
Under the approved plan, sales of the estate’s tokens are to be overseen by a financial advisor. Consequently, most tokens have a weekly cap set at $100 million. The ceiling might increase to $200 million on a token-by-token basis. Additionally, whenever Bitcoin or Ether transactions occur, the U.S. Trustee’s office must receive a 10-day prior notice.
Furthermore, to safeguard against the volatile crypto market, FTX aims to hedge Bitcoin and Ether. This strategic move is intended to reduce the potential impacts of price fluctuations on the sales proceeds. In addition, the estate has expressed interest in staking specific tokens. Such moves will ensure that returns from these token-staking ventures further benefit the creditors.
However, the sale’s traceability has raised questions, with lawyers representing FTX explaining that distinguishing individual crypto deposits is implausible.
“It’s all part of one pool,” they stated.
Hence, upon liquidation, the assets would be converted to cash, ready for distribution according to the plan.
Consequently, the steps taken after their bankruptcy filing in November and holding $3.4 billion in crypto assets are noteworthy since they seem focused on ensuring the best outcomes for their creditors while enhancing their users’ security.
Moreover, FTX customers have until September 29 to file proof of claims with Kroll. With court approval for asset liquidation and stronger security protocols, FTX seems poised to turn the page on a challenging chapter.