The U.S. Justice Department has launched a criminal probe into how $372 million vanished out of FTX-controlled wallets the day that the exchange filed for bankruptcy in November, Bloomberg reported on Tuesday.
On Nov. 11 and early hours of Nov. 12, large sums of cryptocurrency were seen moving out of FTX’s and FTX US’s wallets, and FTX employees did not recognize the transfers that were happening. Authorities tried to freeze some funds on platforms that cooperated with law enforcement, Bloomberg reported, citing a source familiar with the matter. But with offshore exchanges, not all funds that were lost could be controlled and frozen.
Within hours of the transfer in November, stolen funds were converted to ether, another cryptocurrency, through decentralized exchanges, according to blockchain analytics firm Elliptic. Another firm, Chainalysis, tweeted in November that the funds were “on the move” and exchanges should be on “high alert to freeze them if a hacker attempts to cash out.” Chainalysis also said the funds were being converted from ETH to BTC at the time.
Bloomberg said the Justice Department and Manhattan U.S. attorney’s office declined to comment. The Justice Department didn’t immediately respond to a request for comment from MarketWatch.