The post FTX’s Brush with Disaster Highlights Lax Security Practices appeared on BitcoinEthereumNews.com.

Introduction In the volatile world of cryptocurrency, FTX, a globally recognized crypto exchange, found itself amidst a tempest of stringent challenges, having almost hemorrhaged over a billion dollars due to seemingly lenient security protocols in November 2022. A potent concoction of managerial chaos and opaque business practices could have propelled the platform into a financial abyss, averting what could have been a staggering crisis by a whisker. Moment of Crisis: The Breach Unveils & Executives in Action November 11, 2022, will be etched in FTX’s history as a day of profound turmoil. Not only were the exchange’s accounts methodically siphoned, but the company also teetered on the brink of financial disarray by filing for bankruptcy, and its architect, Sam Bankman-Fried, abdicated his throne amidst the chaos. Within a few hours, malefactors succeeded in extracting nearly $400 million in diverse tokens from both FTX and its U.S. counterpart, FTX.US. An unanticipated crisis spiraled into a near-catastrophe, with FTX executives scrambling to safeguard over a billion dollars’ worth of various crypto assets. With the ominous draining of funds in motion, quick thinking and expeditious action became the order of the day, ensuring the salvage of the majority of the finances. While the exact number and locations of wallets and their respective private keys were shrouded in mystery post-bankruptcy, the team, albeit scarcely, maneuvered through the crisis. A Specter of Unknown Malevolence: The Mysterious Assailants While the invaders of FTX’s financial fortress remain shrouded in anonymity, their method of access points towards a stark vulnerability in FTX’s security armour: the private keys. A majority of the funds were stored in hot wallets, directly tethered to the internet and subsequently, providing a viable point of entry for potential intruders. The perpetrators began a systematic drainage of funds, exploiting the disarray that enveloped FTX’s team…

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Filed under: News - @ October 10, 2023 9:10 am