Paxos Rescued $20 Million In Digital Gold From FTX Hack


  • FTX was hacked for hundreds of millions in cryptocurrencies a few hours after filing for bankruptcy.
  • Paxos quickly froze 11,184 Paxos Gold (PAXG) tokens stolen from the crypto exchange following a request from  U.S. Federal authorities
  • The on-chain trust firm recovered roughly $20 million after tracking the assets to four Ethereum addresses. 

Paxos rescued $20 million in digital gold stolen from Sam Bankman-Fried’s crypto exchange FTX, per The Block.

11,184 PAXG Stolen From FTX

An unknown hacker stole 11,184 PAXG tokens backed by real gold in Paxos’ custody from FTX shortly after the crypto exchange declared bankruptcy on November 11, 2022. Reports said the hacker drained over $400 million in other crypto assets like DAI and Ether (ETH) from the platform. 

Paxos is a regulated crypto trust and blockchain company. The firm is also the issuer of Binance USD (BUSD) stablecoin. After the hack, Paxos tracked the PAXG tokens to four Ethereum addresses and froze the assets in compliance with a request from U.S. Federal Law Enforcement.

Notably, the hacker swapped around $300 million in virtual currencies in ETH, becoming of the largest Ether holders. Ethereum’s community grew concerned that the attacker might tank ETH’s price in a bid to launder crypto.

The team reportedly “reclaimed the assets” and transferred $20 million in PAXG tokens from the “FTX Accounts Drainer” wallets to a null address. Paxos’s treasury burned the tokens and minted 11,184 new PAXG tokens into a separate crypto wallet.

FTX Users In Limbo 

Billions in assets from Sam Bankman-Fried’s flatlined exchange remain unaccounted for. The November hacker stole over $400 million in cryptocurrencies and digital assets. The CFTC, SEC, and Federal prosecutors allege $4 billion from customer funds were diverted to Alameda Research, under Bankman-Fried’s instructions.

SBF’s trading giant also hid $8 billion in liabilities on the crypto exchange, per reports. Court filing revealed tens of millions in personal loans to company executives including Bankman-Fried himself. 

The company recovered roughly $1 billion in crypto assets and cash equivalents, according to Bankruptcy CEO John Ray III as he testified before Congress in Washington DC. Ray also remarked recovering assets was a slow process due to a lack of proper accounting in SBF’s crypto empire.

Source link

Share this article: