How Paxos recovered $20m stolen from the FTX hack

Paxos has recovered back its tokens stolen by hackers from the collapsed FTX exchange. Reports about the recovery revealed that 11,184 Paxos Gold (PAXG) tokens, worth about $20 million, were completely recovered from hackers. 

Paxos is a regulated New York-based blockchain company founded in 2013. Amongst the products and services offered to users are cryptocurrency brokerage, asset tokenization, settlement, and exchange. Paxos tokens are digital assets that are backed by real gold in the custody of Paxos.

The crypto firm that’s the issuer of Paxos Gold token lost 11,184 of its tokens to a hacker that attacked FTX in November. The same hacker stole about $477 million worth of tokens from FTX and distributed the tokens to different wallets using tools like RenBridge, owned by FTX.

In the process of stealing and transferring the stolen assets that included Paxos Gold (PAXG), Paxos withheld 11,184 Paxos Gold (PAXG) from four hacker-controlled wallets. And more than a month later they retrieved all the assets from the wallets.

FTX collapse and weak safety procedures

The collapse of FTX has revealed the loss of billions of dollars owned by the company, investors, and customers. According to Chainalysis, the weekly realized losses from FTX peaked at $9 billion in the week starting November 7, 2022.

Further details about FTX from the current co-CEO, John Ray III show that FTX used an unencrypted system to store its private keys which must have enhanced hacking into its assets. The recovery by Paxos is a tiny fraction of what was stolen from FTX.

Other hacks that have occurred in 2022 include Binance (Binance Smart Chain), $566 million; Ronin, $552 million; Wormhole, $326 million; and Nomad, $190 million.

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