As is tradition, we'll start with an explanation. Withdrawals from cryptocurrency exchange FTX were suspended on Tuesday 8 November. At the time, users noticed that the platform's addresses on the Etherium, Tron and Solana networks were exclusively receiving funds, but not withdrawing from them.

At the same time, users of the platform began to complain about delays and the impossibility of making payments.

On November 10 former FTX CEO Sam Bankman-Fried confirmed problems with the platform, but assured that the US division was not affected. The US exchange is allegedly fully liquid and users can withdraw funds without any problems.

Sam Bankman-Fried’s tweet about the alleged liquidity of FTX US

It didn’t last long: Sam filed for bankruptcy on Friday, and withdrawals were suspended for FTX US the same evening.

How the FTX crypto exchange collapsed

There was an amusing exception to the whole situation – it was FTX users who reside in the Bahamas. The exchange is based in the same country. With regulation in mind, the platform prioritised local people and held conclusions for them to comply with local regulations.


In other words, FTX management was trying to reduce the number of potential problems for itself. Therefore, Bahamian users of the platform could withdraw their own coins even when the international version of the exchange had already suspended withdrawals for everyone else.

Secured crypto-investors whose funds were blocked on FTX wanted to take advantage of this feature. Specifically, a Twitter user nicknamed Austerity Sucks offered the equivalent of a million dollars to any employee to manually change that trader’s country of registration to the Bahamas. By doing so, the user wanted the right to withdraw his own funds, bypassing the entire “queue”.

Former FTX CEO Sam Bankman-Fried

As he stated some time later, it was allegedly a ridiculous social experiment, with no one from FTX contacting him. However, some traders undertook to spin the same scheme, but got nothing.


As the user clarified, such a thing wouldn't make sense. Still, once the platform was declared bankrupt, the money would allegedly be returned, Cointelegraph reported.

Although, as the subscribers pointed out, the return concerns Chapter 7 of the US Bankruptcy Code, not 11. So the "joke" component of this version remains in question.

There is a possibility that bribing an FTX employee may indeed have worked. Such an assumption can be made thanks to a well-known trader under the nickname Algod. He said that he would pay $100,000 to the person who would help him with the confirmation procedure. Moreover, he has already provided all the documents.

Offering a reward for passing KYC on FTX

Algod then reported that he had solved the problem.

Algod’s message about passing KYC on FTX

And then users noticed transfers of large sums from the FTX exchange to his address.

Withdrawals to Algod’s wallet from FTX


Apparently, Algod was either a Bahamian national or did some document manipulation. Although at least for the time being he achieved what he wanted.

However, FTX then ran into new problems: an unknown user took to withdrawing coins from the platform to his own wallets, and doing so in large quantities. Some in the blockchain community suggested that it was not a hacker but an insider – that is, an FTX employee.

This person withdrew huge amounts of assets and sold them. For example, he got rid of all stocks of LINK tokens – and there were 3.59 million of them.

As a result, the interim balance of the hacker/insider’s address looks like this.

The balance of the hacker who hacked FTX


It looks like the rest of the users in this whole story have been less fortunate - they will be waiting for their own assets or a certain share of them after the liquidation of the coin stock in FTX's possession. The current "hack" is also likely to affect the situation, but how exactly, and who is behind what is happening, will probably be revealed later.

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