FTX resumes claims process after addressing cyber breach

• FTX confirmed that the breach affected none of its systems.
• The exchange launched the customer claims portal on 11 July, but it inexplicably went offline within an hour

Bankrupt cryptocurrency exchange FTX has taken steps to bolster the security of its customer claims portal following a cyber breach. This has allowed claimants to continue submitting claims for assets held on the exchange before it went insolvent.

According to FTX, none of its systems were affected by the breach, which targeted its appointed bankruptcy claims agent, Kroll. The breach exposed non-sensitive customer data for specific claimants, with FTX emphasizing that account passwords and funds remain unaffected.

FTX provided the following update regarding the recent Kroll cybersecurity incident. Claimants may now resume activities on our platform: https://t.co/DkYi2hDLbI. pic.twitter.com/Nfob4QQxjv

— FTX (@FTX_Official) September 16, 2023

Enhanced measures and progress on assets

Account holders can now access their accounts and proceed with the claims process for digital assets held on the platform prior to its declaration of bankruptcy in November 2022. This applies to individuals who held accounts with FTX, FTX.US, Blockfolio, FTX EU, FTX Japan, and Liquid.

As of 11 September, approximately 36,075 customer claims worth $16 billion had been filed against FTX and FTX.US, with 10% of these claims having been approved. Additionally, 2,300 non-customer claims totaling $65 billion had been filed, including claims from Genesis, Celsius, and Voyager.

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FTX clarified that freezing the accounts had been a precautionary measure. It added that it has implemented additional security measures since then. The exchange took these actions in response to several issues reported with the claims portal recently.

FTX launched the customer claims portal on 11 July. However, it inexplicably went offline within an hour of its launch.

On 27 August, FTX temporarily suspended accounts for affected users who accessed its claims portal after the initial discovery of the cybersecurity attack against Kroll. Despite the suspension, users were still able to submit proof-of-claim via Kroll’s online customer form and by mail.

In another related development, the U.S. Bankruptcy Court for the District of Delaware recently approved the sale of FTX’s digital assets. Judge John Dorsey issued a ruling on 13 September, permitting FTX to sell assets in weekly batches, subject to strict conditions, through an investment adviser.

The initial week has a $50 million limit, followed by $100 million in subsequent weeks. However, FTX remains prohibited from selling its Bitcoin [BTC], Ethereum [ETH], and “certain insider-affiliated tokens” without a separate decision, following a 10-day notice to committees and the U.S. trustee.