Report: FTX has stored almost all of its cryptocurrency assets in hot wallets, and the private keys are not securely stored

ChainCatcher news, recently a mid-term report on the control failures of FTX and related businesses was released, written by FTX's interim CEO John Ray III and an external legal team. The report discusses key areas of control failures by FTX's former management team, including management and governance, finance and accounting, digital asset management, information security, and cybersecurity.

The report states, "The FTX team kept almost all of its crypto assets in hot wallets," which did not require multi-signature to transfer assets. Any employee could transfer assets worth millions of dollars, and the keys to the wallets were not well protected.

For example, a wallet holding over $100 million in "Ethereum assets" had its private key stored in unencrypted plain text and was easily accessible. Additionally, private keys for billions of dollars in extra digital assets were stored in an AWS password manager, and "many FTX team employees" could access and transfer these assets at any time. (Source link)