bankruptcy proceedings, insider threats or hacking?

The recent tensions between the two major crypto exchanges FTX and Binance, which was accompanied by a massive sale of FTX Token (FTT), led to the collapse of around 130 companies linked to the FTX group – including FTX Trading, FTX US , West Realm Shires Services and Alameda Research.

Following the resignation of FTX CEO Sam Bankman-Fried and the revelation of the company’s intention to file for Chapter 11 bankruptcy, on-chain data hinted at the start of bankruptcy proceedings, as multiple FTX wallets were found transferring funds to a common Ethereum (ETH) wallet address.

The wallet address in question received funds from various international and US-based wallets linked to FTX, which raised over 83,878.63 ETH (worth over $105.3 million) in just two hours starting at 9:20 p.m. ET on November 1. 11 and has continued to see an influx of funds at the time of writing.

With all eyes on FTX, late night fund transfers on a Friday night raised questions about the company’s intent. While some blockchain investigators saw this as the start of the bankruptcy process, speculation around ill intent or an external hack surfaced in the crypto ecosystem.

The wallet owner was found exchanging $26 million worth of Tether (USDT) for DAI via 1inclh while endorsing USDP – a stablecoin issued by Paxos – for trading on the CoW protocol. As the situation evolves, the wallet has also approved transfers and sales of other cryptocurrencies, including Chainlink (LINK), cUSDT, and stETH.

Funds from FTX wallets were then moved to new addresses, one of which was tagged FTX on Etherscan, as pointed out by blockchain investigator PeckShield. A further investigation also confirmed that 8,000 ETH was routed from Solana to one of the new addresses in the last hour.

The involvement of a hacker, at present, seems unlikely as they would have typically moved funds from FTX’s wallet to their own wallet. However, many pointed to possible insider involvement.

Until the dust settles, the community continues to monitor the movement of funds. However, investors are advised to avoid speculation until confirmed reports come out. FTX has yet to respond to Cointelegraph’s request for comment.

Related: The Ongoing FTX Saga: Everything That Happened So Far

Adding to investor concerns, FTX sources told Reuters that between $1 billion and $2 billion of customer money was not accounted for in the company’s spreadsheet.

The unconfirmed report also suggests that SBF secretly transferred $10 billion in funds to Alameda Research while stressing that the whereabouts of the missing funds remain unknown.