Following the massive hack that hit the FTX platform, cryptocurrency exchange Kraken has frozen accounts with fraudulent activity related to FTX. Let’s get the facts straight.
Kraken freezes fraudulent FTX accounts
In the wake of its bankruptcy, the FTX Group faced new complications: a hacker took out several hundred million dollars from the platform.
After a few hours, Kraken’s head of security, Nick Percoco, took to Twitter to say that his teams know the identity of an account linked to the hack. The user is believed to have attempted to steal funds from FTX by routing them through the Kraken exchange.
As a result, Kraken has decided to freeze several accounts directly related to the FTX group:
Kraken has spoken with law enforcement regarding a handful of accounts owned by the bankrupt FTX Group, Alameda Research and their executives. Those accounts have been frozen to protect their creditors.
Other Kraken clients are not affected. Kraken maintains full reserves.
– Kraken Exchange (@krakenfx) November 13, 2022
Kraken spoke to law enforcement about a handful of accounts belonging to FTX Group, Alameda Research and their executives, all of whom are in bankruptcy. These accounts have been frozen to protect their creditors. Kraken’s other customers are not affected. Kraken is maintaining its full reserves. “
The consequences of Kraken’s move are twofold: blocking hackers from seizing the funds, while preventing FTX teams from using the assets.
In fact, according to a Kraken spokesperson, these blocks are all done manually:
We will resolve each account on a case-by-case basis, and may seek advice from the bankruptcy court or the trustee depending on the situation “
In addition, Kraken is involving law enforcement investigating FTX in the process of blocking these accounts.
At the time of writing, FTX is being investigated by the Bahamian police, as well as by the US Securities and Exchange Commission (SEC). The purpose of this investigation is to determine whether or not the firm has engaged in criminal activity.
It should be recalled that the former CEO of FTX, Sam Bankman-Fried, is also under investigation by the SEC in relation to securities jurisdiction.
In other words, the American institution is looking into whether or not Sam Bankman-Fried violated the laws concerning the financial markets.
