Crypto prime brokerage FPG suspends withdrawals after June 11 attack

• Cryptocurrency prime brokerage FPG has suspended deposits and withdrawals following a cyber-security incident.  
• The platform’s characteristic account segregation model limited the exploit, which caused almost $20 million in losses so far.
• Notably, the brokerage’s customers manage more than $50 billion in crypto assets.

Floating Point Group (FPG) has disclosed a hack that took place on Sunday, June 11, causing the cryptocurrency prime brokerage to lose upwards of $15 million. In the wake of this exploit, the company has suspended all trading, deposits, and withdrawals alike, giving time for a thorough probe. The attack adds to the list of exploits this year, with the most recent one concerning Ethereum (ETH).

Also Read: Ethereum worth $7.5M stolen in Arbitrum-based Jimbos Protocol exploit

Notably, the attack comes barely six months after the platform announced having earned Service Organization Control 2 (SOC 2) certification. For the layperson, the SOC2 is a conventional standard to determine the security implementation of a service entity, including its privacy and related controls. This ensures reliability when handling sensitive data and systems.

Floating Point Group discloses multi-million dollar attack

Floating Point Group, a renowned cryptocurrency prime brokerage whose customers manage more than $50 billion worth of assets, has had to suspend trading activities after a cyber-attack. The incident, which took place on June 11, has compelled the platform to cease deposits and withdrawals for seamless investigation.

FPG’s first response after discovering the loot was to lock all third-party accounts and then move the contents of these accounts to minimize risk as the brokerage attempted to understand the incident. Based on the report, the attack and its associated impact would have been worse if FPG had used any other operational dynamics apart from its characteristic “account segregation” model.

Nevertheless, the exploit saw the platform lose a jaw-breaking $15-20 million in cryptocurrencies. Notably, this figure refers to the discovery as of June 14, which means it could be more.

While the loss at this point is still being investigated and analyzed, the number as we understand it today is between $15M-$20M in cryptocurrencies lost.

Reportedly, forensic analysts have already been outsourced from the Federal Bureau of Investigations (FBI), the Department of Homeland Security, regulators, and Chainalysis. These teams are collaborating with FPG’s in-house security personnel to establish the scope and circumstances that led to the incident, with hopes of preventing a reoccurrence as well as trying to recover the funds.  

As standard operating procedure demands, the crypto prime brokerage can only reveal information to some extent, considering it is still an active investigation. Nevertheless, the firm has committed to keeping the public appraised.

Notably, high net-worth investors like Coinbase Ventures, SkyBridge Capital’s Anthony Scaramucci, and AngelList founder Naval Ravikant back the brokerage, after a $12 million raise in total funding to date. 

FPG attack jeopardizes VASP registration

The attack has threatened FPG’s Virtual Asset Service Provider (VASP) registration in the Cayman Islands, which was secured barely a year ago in August. The registration rendered the company capable of holding customer assets safely while ensuring that its customer's assets are protected from its own creditors on the off chance that the company becomes bankrupt. At the time, the firm said it had only up to 100 customers.