There is no doubt that FTX clients around the world regret their decision to sign up with the now bankrupt cryptocurrency exchange. To make matters worse, they are now targets for scammers posing as the US Department of Justice.
Police in Singapore on Saturday warned of a website pretending to be hosted by the Ministry of Justice – and supposedly helping FTX users get their money back. The site directs visitors to log in with their FTX username and password. She then claims that she will be able to withdraw her money after paying the legal fees.
“The site is likely to be a phishing site to collect login credentials,” police said, according to Channel News Asia.
FTX exploded in dramatic fashion this month after it was hit with $6 billion in withdrawal requests over the course of three days – the equivalent of a bank operating cryptocurrency. It declared bankruptcy on November 11, the same day that company founder Sam Bankman-Fried stepped down as CEO. Calls for stricter regulation of the cryptocurrency sector have increased exponentially in the wake of its collapse.
Under new CEO John J. Ray III, the company has begun a strategic review of global assets as part of the Chapter 11 bankruptcy process. Ray has also been involved in cleaning up the mess after the Enron scandal, to which former US Treasury Secretary Larry Summers compared the failure of FTX.
Ray said this week that he had never seen “such a complete failure of company controls and such a complete absence of trustworthy financial information” as he had seen at FTX.
“The whole operation was run by a gang of kids in the Bahamas,” a person familiar with the matter told CoinDesk on condition of anonymity.
Comments like this will provide a little reassurance to FTX customers who panicked after their FTX holdings were frozen. But it does present an opportunity for scammers looking to capitalize on their desperation.
In Singapore, retail investors aren’t the only ones getting burned by FTX. Government-owned holding company Temasek issued a statement this week saying its stake in the cryptocurrency exchange is now worthless. It said it did eight months of due diligence on FTX, including a review of audited financial statements that showed the company was profitable. It invested $210 million in FTX International and $65 million in FTX US.
“While this write-down of our investment in FTX will not have a significant impact on our overall performance,” she wrote, “we take any investment losses very seriously and there will be lessons for us from this.”
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