Paxos Recovers $20 Million In Gold Tokens Stolen

Paxos, a trust and blockchain company, has successfully reclaimed $20 Million worth of gold tokens from the wallets of an unidentified attacker who hacked FTX last November.

Shortly after the company filed for Chapter 11 bankruptcy protection, Sam Bankman-Fried was able to profit from its failed exchange. Paxos Gold tokens (PAXG), backed with real gold in Paxos custody, were among the most seized assets.

Paxos quickly froze 11,184 Paxos Gold ($PAXG) from four hacker-controlled wallets worth $20 million. The assets were reclaimed by the team six weeks later.

Yesterday, Paxos moved the stolen tokens from Etherscan addresses marked as “FTX Accounts drainer” and transferred them to a null location. Then it burned them.

Security firm PeckShield observed this based on on-chain information. It then minted the exact amount in another wallet, which completed the reclamation process.

The Paxos theft is only a fraction of the heist. The FTX drainer wallet had $302 million worth of ether. This was almost all FTX reserves.

John Ray III, the new chief of FTX, stated in prepared testimony that FTX had stored its private keys in its wallets in an insecure manner and used poor security controls. These factors could have allowed the hacker to gain access to their wallets.

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