Withdrawals authorized from Bahamas-based accounts last week were not at the request of the country’s regulators as FTX originally claimed
In a statement on Nov. 12, the Securities Commission of the Bahamas said it had not “directed, authorized, or suggested” that FTX prioritize withdrawals of Bahamas clients.
The regulator referenced FTX’s statement posted to Twitter on Nov. 10, where the exchange claimed to be processing withdrawals in order to comply with a request from regulators.
“Per our Bahamian HQ’s regulation and regulators, we have begun to facilitate withdrawals of Bahamian funds. As such, you may have seen some withdrawals processed by FTX recently as we complied with the regulators,” stated FTX in a tweet.
The Bahamas Securities Commission’s statement refuting the notion that it made any such request further antagonized users, most of whom now believe that FTX insiders lied to get their own funds out of the exchange.
“This implies FTX lied and did this out of SELF INTEREST to recover their personal funds and those of large VCs registered in the Bahamas,” tweeted crypto trader KALEO.
Chaos ensued after FTX began processing withdrawals for Bahamas-based clients on Thursday, with a number of users purchasing KYC-compliant Bahamas accounts on the exchange in order to withdraw their funds. Data compiled by Lookonchain estimated that nearly $24 million worth of USDT was withdrawn from FTX over a five-hour period on Thursday.
Late on Friday, FTX was reportedly hacked as $600 million was unexpectedly moved off the exchange.
“FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don’t go on FTX site as it might download Trojans,” an FTX account administrator wrote in the exchange’s Support Telegram chat.
Skeptical users viewed the suspicious outflows as an “inside job” rather than a compromised security at the bankrupt crypto exchange. On-chain analysts following the money reported that the nature of transactions were not consistent with a typical hack, with the attacker using centralized exchange Kraken to offload funds
“We know the identity of the user,” tweeted Nick Percoco, chief security officer at Kraken, on Nov. 12.
Percoco followed up with an update saying that FTX will make a public statement “regarding the sweeping of the Tron wallet in question and using the funds held on Kraken to complete the transaction.