FTX to Compensate Phishing Victims with $6 Million

The crypto exchange FTX will compensate the phishing attack victims with almost $6 million. It is a one-time step taken by the exchange for the attack with which hackers conducted unauthorized trading using some FTX customer accounts.

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The attackers gained the user account application programming interface (API) keys of the victims with phishing tactics for executing the trades. The incident came to light as 3Commas alerted on October 21 against some usual trading activities.

FTX and 3Commas conducted an investigation and subsequently suspended the suspicious accounts and disabled compromised keys.

FTXs Founder and CEO, Sam Bankman-Fried, twittered that the exchange users should not take it as a 'precedent'.

“THIS IS A ONE-TIME THING AND WE WILL NOT DO THIS GOING FORWARD,” he added. “We will not [be] making a habit of compensating for uses getting phished by fake versions of other companies!”

A Major Crypto Platform

FTX made its name by offering crypto derivatives for altcoins. However, it aggressively expanded services in all markets with a comprehensive product line and gained regulatory permissions in several jurisdictions.

Bankman-Fried also came with his deep pockets for bailing out several collapsed-cryptocurrency platforms earlier this year with the ongoing bear market. The US arm of FTX won the bid to acquire the digital assets of collapsed Voyager for $1.4 billion.

The crypto billionaire further proposed the “5-5 standard” under which the attacker can keep $5 million or 5% of the heist, whichever is lower. In case of the said phishing attack, the attacker needs to send almost $5.7 million of the ill-gotten funds for FTX to “absolve them.”

Meanwhile, hacks and rug-pulls remain common in the crypto space. According to Chainlysis, $718 million worth of cryptocurrencies were stolen from decentralized finance (DeFi) protocols in October alone.