During the hacker attack on FTX, consultant Kumanan Ramanathan used a personal Ledger Nano hardware wallet to protect vulnerable assets. This is reported by Wired.
On 11 November 2022, an unusual outflow of funds unsettled the company’s staff and executives. The firm estimates that the hacker siphoned more than $400 million in cryptocurrency, but thanks to Ramanathan, another portion of the funds was safeguarded.
According to the publication, LedgerX CEO Zak Dexter was among the first to notice the breach and convened an emergency call for FTX management. Witnesses say the hacker was transferring funds right before the staff’s eyes. At the meeting, the exchange’s founder Sam Bankman-Fried was not present.
FTX chief technology officer Gary Wang struggled for some time to persuade anyone to take action to safeguard the funds, as many did not trust him and believed the money had already disappeared.
“A fox in the henhouse, and you’re going to change the locks on the henhouse?” colleagues asked.
Dexter approached the custodian BitGo with a request to create cold wallets to move the remaining funds. Company representatives said they would create them within half an hour, but FTX staff decided that an interim solution was needed in the meantime.
A consultant who had been working with FTX, Alvarez & Marsall, said that a Ledger Nano was in the office. He proposed using the hardware wallet as temporary storage.
According to the publication, Wang transferred between $400 million and $500 million to Ramanathan’s address. This helped reduce further losses, the exchange’s staff acknowledged in conversations with journalists.
Assets remained on Ramanathan’s device until BitGo prepared cold wallets. According to Wired, more than $1.1 billion was subsequently moved to new addresses.
Another roughly $400 million was transferred to the Bahamas Securities Commission “for safety.”
Earlier, the Arkham Intel Exchange administration announced a reward for the FTX hacker of 100,000 ARKM.
Earlier, in October, the exchange’s chief technology officer admitted that the balance of the company’s insurance fund was based on a formula that included an arbitrary number and daily trading volume.
The press also reported that FTX allowed Alameda Research to have a negative balance of $65 billion.