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FTX recipients lose bitcoin on DeFi platform

Curators who were trying to secure the assets of the bankrupt crypto exchange FTX made a huge mistake.

By Finst News
• 2 min read
FTX recipients lose bitcoin on DeFi platform

Curators who wanted to secure the assets of the bankrupt crypto exchange FTX made a huge mistake. On-chain data show that the curators have lost $72,000 worth of Wrapped BTC.

According to reports from analytics platform Arkham Intelligence, FTX and Alameda Research have lost at least four Wrapped BTC on DeFi lending platform Aave. With this move the curators were trying to safeguard customer funds. "The liquidators would benefit from bringing in a DeFi expert to recover as much of the money as possible," said Zachary Lerangis, Arkham's head of Operations.

Lerangis adds: ‘"Handling DeFi apps safely requires some expertise. Loans on Aave, for example, are overcollateralized. Once a loan is repaid, the borrower also gets back their collateral. Instead of paying back the debt to close the position, the liquidators preferred to remove all additional securities, causing the positions to be liquidated."'

Compared to the total size of the FTX bankruptcy, the damage from the blunder is however limited. Reportedly they have so far managed to seize $5 billion. The US Attorney's Office in Manhattan recently announced the creation of a "task force." This task force will use cyber capabilities to seize funds.

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