FTX to Provide $6M for Phishing Victims, But There’s a Catch

The cryptocurrency platform FTX will distribute approximately $6 million to reimburse victims affected by a recent phishing attack.

CEO Sam Bankman-Fried revealed this is a one-off decision, underlining that the company will not compensate such customers in the future.

Only This Time

Last week, hackers targeted several FTX users and drained $1.26M worth of cryptocurrencies. One victim discovered that their account using the 3Commas API had traded the DMM: Governance (DMG) token over 5,000 times, indicating for a phishing attack that resulted in the substantial loss of funds.

The affected person contacted FTX about the incident and submitted a police report. Initially, the exchange did not reply and took no further action, the victim claimed.

In a recent series of tweets, FTX’s Founder and CEO – Sam Bankman-Fried (SBF) – broke the silence, saying the trading venue will provide roughly $6 million in compensation to the victims of the phishing scam.

However, he explained that any future similar cases will not be resolved in that manner, stressing, “this is a one-time thing.”

13) But in this particular case, we will compensate the affected users.

THIS IS A ONE-TIME THING AND WE WILL NOT DO THIS GOING FORWARD.

THIS IS NOT A PRECEDENT.

We will not making a habit of compensating for uses getting phished by fake versions of other companies!

— SBF (@SBF_FTX) October 23, 2022

SBF said the reimbursement will be only for FTX users. He also raised hopes that other exchanges will follow suit and compensate their clients who have become victims of such attacks.

Some Recent Phishing Scams

That type of scam, where a wrongdoer sends a fraudulent message to lure individuals into revealing sensitive information, has become increasingly popular lately.

In July, hackers targeted the liquidity providers of the Uniswap V3 protocol and siphoned more than $8 million worth of ETH from thousands of addresses.

Several reports from last week indicated that the notorious North Korean hacker collective – the Lazarus Group – sent phishing emails to employees of Japanese crypto companies to trick them into installing malware.

A few days ago, a group of hackers compromised the official Twitter account of Gate.io to promote a phishing scam. The criminals announced a prize of 500 USDT to the first 1,000 individuals who connected their wallets to a fraudulent page.

Gate.io received numerous warnings from the community and managed to cope with the incident.