FTX to Compensate Phishing Victims With $6M
- FTX CEO Sam Bankman-Fried noted that the compensation plan would be a one-time gesture.
- SBF recently proposed a “5-5 standard” model, which would allow hackers to keep part of the stolen funds and return some.
Cryptocurrency exchange FTX has announced a $6 million compensation plan for victims of a phishing scam. FTX chief, Sam Bankman-Fried, showed his generous side once again after announcing in a Twitter thread that the trading platform would compensate users “phished by fake versions of other companies in the space,” despite not being its policy. The 30-year-old, however, warned that this was a one-time gesture and would not be repeated again.
“To be clear, phishing is almost always a case where the user voluntarily (but unknowingly) gives their account credentials to a scammer by going to a bad site or something like that–but despite that, we take our duty to protect customers seriously, even from themselves,” SBF wrote in a tweet.
FTX users suffered huge losses in a recent phishing attack which saw the hackers gain access to some users’ account application programming interface (API) keys. This enabled them to use their crypto accounts for illegal trading.
The hack was discovered on October 21 after 3Commas claimed it received notification that some of its users had experienced unauthorized trading activity. FTX and 3Commas suspended the compromised accounts after conducting an initial assessment. They also disabled the hacked API keys to prevent further damage.
In a recent blog post on crypto regulation, Bankman-Fried proposed a concept he called the “5-5 standard” that would allow hackers to keep either $5 million or 5% of the funds they have stolen, whichever is less.
Following the recent phishing attack, the 30-year-old billionaire decided it was time to test out his new model. SBF urged the hacker to bring back 95% of the funds taken, or roughly $5.7 million, within 24 hours, promising that “we’ll absolve them.”
October has been one of the bloodiest months and has seen around $3 billion exploited in 125 different events since it began. Blockchain analysis firm, Chainalysis, noted that October 2022 had been the biggest in terms of hacking activities in crypto history.
On the other hand, FTX boss and crypto “saviour,” Bankman-Fried, has been in the spotlight since Q3, mostly for his political views as well as crypto ambitions. SBF was the subject of criticism from crypto community members over the weekend following a series of tweets he made regarding his preferred crypto regulatory approach.
Some critics argued that SBF’s goals did not align with those of the early crypto adopters. Others believed his ideologies were not progressive.
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