Wisconsin Department of Financial Institutions Cautions Investors Regarding FTX Bankruptcy Filings and Allegations of Hacks and Scams

​For Immediate Release: November 29, 2022

Wisconsin Department of Financial Institutions Cautions Investors Regarding FTX Bankruptcy Filings and Allegations of Hacks and Scams

MADISON, Wis. – The Wisconsin Department of Financial Institutions (DFI) cautions Wisconsin investors to avoid FTX.US and FTX.COM websites as they may be corrupted by malware and/or experiencing cyber-attacks following the bankruptcy of U.S. based cryptocurrency exchange FTX.US along with FTX.COM and 130+ other businesses (“FTX”) affiliated with founder Sam Bankman-Fried. Investors should also beware of “reload” scams where fraudsters purport to help recoup funds that are locked in accounts or otherwise unavailable.

On November 11, 2022, FTX filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware. The initial filing claimed between $10 billion and $50 billion of estimated assets and liabilities. On November 17, 2022, the newly appointed CEO of FTX reported at least $372 million in unauthorized transfers were initiated on the bankruptcy filing date. FTX immediately began moving cryptocurrencies to cold storage to mitigate further loss. Further, FTX reported that its official Telegram channel was compromised, and that users should avoid the FTX.US and FTX.COM websites as they may be corrupted by malware and/or experiencing cyber-attacks. Investors who wish to unlink their bank account information from any FTX Apps they have downloaded on their mobile phones, tablets, or other electronic devices can find assistance at https://support-my.plaid.com/hc/en-us/articles/10189531069847.

Investors should also beware of “reload” scams where fraudsters purport to help recoup funds that are locked in accounts or otherwise unavailable. For example, law enforcement in Singapore warned about a fake website pretending to be hosted by the U.S. Department of Justice. The phishing website instructs visitors to log in with their FTX username and password, and falsely claims they will be able to withdraw their funds after paying legal fees. There are many versions of the reload scam and investors should be cautious when interacting with any persons or entities whom they do not know and cannot independently verify their identities and credentials.

The FTX bankruptcy follows on the heels of bankruptcy filings by the crypto-lending firms Celsius Network, LLC and Voyager Digital Holdings, Inc. In addition, BlockFi, Inc. filed for bankruptcy this week and Gemini Trust Company, LLC has paused withdrawals from its crypto-lending program.

“As these cases demonstrate, customers who hold their crypto on either a platform or exchange can lose access to their funds – as happened with FTX, Celsius, Voyager, and now Gemini customers,” said DFI Secretary-designee Cheryll Olson-Collins. “Moreover, tech failures, hacks, and volatility in the market can impact crypto fintech firms and their customers. Given these uncertain times, investors should consider whether they can afford to lose the funds they have before investing in cryptocurrency.”

Before making any financial decisions, the DFI recommends investors do their homework, ask questions, and contact the DFI’s Division of Securities by phone at (608) 266-2139 or by email at DFISecurities@dfi.wisconsin.gov for more information.

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Media Contact Email: DFICommunications@dfi.wisconsin.gov​