FTX announces plans to compensate phishing scam victims


FTX has announced that it will compensate users whose accounts were breached by hackers $6 million. The hackers took over some of the accounts on the platform, carrying out illegal trades some days ago. According to a Twitter post by the exchange CEO Sam Bankman Fried, the exchange generally has a rule of not paying compensation to users who fall into phishing scams. However, he noted that this case differs from the others, and the firm will make an exception.

FTX boss says the compensation is just a one-time thing

The FTX boss mentioned that this compensation was the only one the firm would do, and in the case of another occurrence, it will not pay compensation. In his statement on Twitter, he mentioned that this act should not serve as a precedent and clarified that only affected users will be paid. He also noted that users on its platform would only receive the reimbursements as other exchanges might do so if they wished.

The phishing attack enabled hackers to breach the API of users across several crypto exchanges, using the accounts to carry out several trades. Some days ago, the news made the rounds after an analysis website was told that users saw transactions they didn’t sanction in their accounts.

Hackers stole $3 billion in October 2022

FTX announced that it moved swiftly to halt the affected accounts and the API keys. Before the incident, Bankman Fried had published a detailed report about his thoughts on the hacks and scams in the crypto sector and the way forward. He also noted that regulators could create a rule which will see hackers hold on to either $5 million of their loot or take 5% before returning the remaining funds.

There has been series of hacks in October, leading the market to dub the month hacktober. A recent Chainalysis report noted that October had witnessed the highest hack incidents in the market’s history. The report claimed that hackers could steal a total of $3 billion front individuals and firms across the market. Although regulators are trying to mitigate the occurrences, it looks like the hackers are becoming wiser as the days roll on.

Owotunse Adebayo

Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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