FTX (FTT) to Provide One-Time Compensation to Recent Phishing Attack Victims

FTX phishing attack compensation

Crypto exchange FTX (FTT) announced on Monday that it’s going to give a one-time $6 million compensation to the victims of a recent phishing attack that gave hackers access to conduct unauthorized trade on some users’ accounts.

FTX boss Sam Bankman-Fried said in a tweet that while FTX has no responsibility for the attack, it will still reimburse the affected users. However, the crypto billionaire stressed the compensation is a one-time affair and will not set a precedent for the future.

“Not only was this not FTX getting phished, it wasn't even an FTX site. And in general we can't compensate for users getting phished by fake versions of other companies in the space! It isn't FTX and we have basically no control over it,” he said. “We will not making a habit of compensating for uses getting phished by fake versions of other companies!”

The recent phishing attack saw hackers getting application programming interface (API) keys, which in turn allowed them to make unauthorized trades on behalf of users trading on FTX and other exchanges. This was first noticed by automated crypto trading bot provider 3Commas which later, together with FTX, suspended the affected accounts and disabled all compromised API keys.

October has been the worst month for crypto users in terms of stolen funds. According to data from Chainalysis, hackers have stolen $718 million in the first half of October.

On the Flipside

  • While the phishing incident happened across many centralized exchanges like Binance, FTX will reimburse only its users.
  • It remains unclear whether the affected users will receive full or partial compensation.

Why You Should Care

Phishing attacks are one of the most commonly applied scam tactics in the world. In crypto, it’s used to persuade people into believing that fake companies are doing airdrops or that they’ve won something. Scammers will do anything to convince their victims to click on their links and divulge their personal information.

While FTX’s move has been met with applause from the general crypto community, Sam Bankman-Fried has made it clear that the compensation is a one-time response.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

Author

Rue Abernai is a blockchain content writer focused on Web 3.0 domains, DeFi, and Ethereum Layer-2s. Rue believes blockchain technology has the potential to transform how we see and interact with society, economy, and culture. Rue spends his spare time hiking, playing with his dog, and reading. He has been active in blockchain and cryptocurrencies since 2020.