HONG KONG: Crypto exchange FTX was engulfed in further chaos on Saturday when the company said it had detected unauthorised transactions and analysts flagged that millions of dollars of assets had been moved from the platform in `suspiclous circumstances`.

FTX filed for bankruptcy on Friday after traders rushed to withdraw $6 billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal.

At least $1bn of customer funds have vanished from the platform, sources told Reuters on Friday. The firm`s founder Sam Bankman-Fried had transferred $10bn of customer funds to his trading company, Alameda Research, the sources said.

New problems emerged on Saturday when FTX`s US general counsel Ryne Miller said in a tweet that the firm`s digital assets were being moved into socalled cold storage `to mitigate damage upon observing unauthorised transactions.` Cold storage refers to crypto wallets that are not connected to the internet to guard against hackers.Blockchain analytics firm Elliptic said that around $473 million worth of cryptoassets were `moved out of FTX wallets in suspicious circumstances early this morning`, but that it could not confirm that the tokens had been stolen.

FTX`s dramatic fall from grace has seen 30-year-old Bankman-Fried, known for his shorts and t-shirt attire, morph from being poster child of crypto`s successes to the protagonist of the industry`s highest-profile crash.

The collapse shocked investors and prompted fresh calls to regulate the cryptoasset sector, which has seen lossesstackupsofarthisyearascryptocurrency prices collapsed.

`Things will continue to simmer after the FTX crash,` said Alan Wong, operations manager of Hong Kong Digital Asset Exchange.

`With a gap of $8bn between liabilities and assets, when FTX is insolvent, it will trigger a domino effect, which will lead to a series of investors related to F TX going bankrupt or being forced to sell assets. In an illiquid bear market, the event will lead to a new roundof cryptocurrency declines, as well as a liquidation of leverage.

Market fallout Since its founding in 2019, FTX had raised more than $2bn from top investors including Sequoia, SoftBank, BlackRock and Temasek. In January, FTX had raised $400m from investors at a $32bn valuation.

SoftBank and Sequoia Capital said they were marking their investments in F TX down to zero.

Cryptocurrency exchange Coinbase Global Inc will also write off the investment its ventures arm made in FTX in 2021, according to a person familiar with the matter.

Bitcoin fell below $16,000 for the first time since 2020 after Binance abandoned its rescue deal on Wednesday.

On Saturday it was trading around $16,831, down by more than 75pc from the all-time high of $69,000 it in November last year .

FTX`s token FTT plunged by around 91pc this week. Shares of cryptocurrency and blockchain-relatedfirms have also declined.

`We believe cryptocurrency mar-kets remain too small and too siloed to cause contagion in financial markets,with an $890bn marl(et cap in comparison to US equity`s $41 trillion,` Citi analysts wrote.

`Over four years, F TX raised $1.8bn from venture capital and pension funds. This is the primary way financial markets could suffer, as it may have further minor implications for portfolio shocks in a volatile macro regime.

In its bankruptcy petition, FTX Trading said it has $10bn to $50bn in assets, $10bn to $50bn in liabilities, and more than 100,000 creditors. John J. Ray III, a restructuring expert, was appointed to take over as CEO.

The US securities regulator is investigating FTX.com`s handling of customer funds amid a liquidity crunch, as well its crypto-lending activities, a source with knowledge of the inquiry said.

Hedge fund Galois Capital had half its assets trapped on FTX, the Financial Times reported on Saturday, citing a letter from cofounder Kevin Zhou to investors and estimating the amount to be around $100m.-Reuters