Crypto Exchange Kraken Freezes Accounts of FTX, Alameda Research, Their Executives

Crypto exchange Kraken has frozen a handful of accounts owned by the bankrupt FTX Group, Alameda Research, and their executives. Kraken has been in contact with law enforcement after discovering that an account on its platform was used in connection with unauthorized transfers at FTX.

Cryptocurrency exchange Kraken has taken steps to freeze verified accounts on its platform belonging to FTX Group, Alameda Research, and their executives. The official Twitter account for Kraken tweeted early Sunday morning:

Kraken has spoken with law enforcement regarding a handful of accounts owned by the bankrupt FTX Group, Alameda Research and their executives. Those accounts have been frozen to protect their creditors.

Kraken stressed: “Other Kraken clients are not affected. Kraken maintains full reserves.”

FTX filed for Chapter 11 bankruptcy Friday. John Ray was appointed the new chief executive of FTX Group after Sam Bankman-Fried stepped down.

Following FTX’s bankruptcy filings, Twitter users noticed that the exchange’s wallets were being drained. Ray, FTX’s new CEO and chief restructuring officer, subsequently confirmed the unauthorized transfers.

Twitter users also noticed that funds were moved from Kraken to a wallet used to hold some of the stolen tokens. A few hours later, Nick Percoco, Kraken’s chief security officer, tweeted: “We know the identity of this account.” However, he noted that he could not reveal the user’s identity publicly on social media.

FTX general counsel Ryne Miller explained Saturday: “Following the Chapter 11 bankruptcy filings — FTX US and FTX.com initiated precautionary steps to move all digital assets to cold storage. [The] process was expedited this evening — to mitigate damage upon observing unauthorized transactions.”

Miller then quoted the new FTX CEO as saying:

As widely reported, unauthorized access to certain assets has occurred … We have been in contact with, and are coordinating with law enforcement and relevant regulators.

What do you think about Kraken freezing the accounts of FTX, Alameda Research, and their executives? Let us know in the comments section below.