Performing a "Hat Trick," He Pulls Off $1.2 Billion Heist from FTX

Original Article Title: "Finding a Loophole Three Times, Meerun Absconds with $1.2 Billion from FTX"

Original Article Author: Nancy, Odaily Planet Daily

Last week, a lawsuit filed by FTX revealed that a Mauritian citizen named Nawaaz Mohammad Meerun (hereinafter Meerun) managed to siphon $1.2 billion from the FTX exchange and Alameda Research over a year without leaving concrete evidence.

Debut: Mysterious Whale Absconds with $450 Million

Meerun's debut took place in January 2021 when he chose a low-liquidity token, BTMX, as his first prey. Over two months, he continuously bought BTMX on both BitMax and FTX platforms, eventually controlling around 50% of the total supply. Under Meerun's influence, the price of BTMX surged from $0.03 to $3, a staggering 10,000% increase.

Meerun then exploited a loophole in FTX's margin trading system, using the inflated BTMX as collateral to borrow billions of dollars. Subsequently, he swiftly withdrew the funds, transferring $450 million to multiple wallet addresses.

The lawsuit pointed out: "Meerun was well aware that once his manipulation ceased, the price of BTMX would collapse, and he would need to return all the 'borrowed' assets. However, Meerun never intended to abide by FTX's rules."

Despite BitMax's warning to the FTX team about abnormal trading, the FTX management did not take action. The FTX team locked his account but forgot to disable his withdrawal function. After Meerun cashed out and left, some employees even attempted to shift this loss to Alameda Research to conceal the incident.

Alameda Turns into Meerun's ATM

After successfully manipulating BTMX, Meerun did not stop there. Instead, he turned to a different strategy—shorting. He targeted another low-profile token, Mobile Coin (MOB).

Meerun first established a short position of approximately 10% of MOB's total supply on FTX, which Alameda was later forced to take over. To cover the short position, Alameda purchased a large amount of the token.

During Alameda's weeks-long buying frenzy, MOB's price soared by 750%, rising from $8 to $68. Alameda paid a significant premium, and after Alameda slowed down its buying, the price quickly plummeted. In the end, this trade resulted in Alameda losing approximately $1 billion, while Meerun once again successfully cashed out.

In August 2021, Meerun reportedly utilized new accounts and aliases to execute a similar manipulation scheme with low-liquidity tokens such as BAO, TOMO, and SXP, profiting nearly $200 million before FTX became aware.

KNC Event: The Final Attempt, a Failure (or Was It?)

After multiple successes, Meerun once again set his sights on the KNC token. He meticulously set up a complex account structure, using stolen or forged KYC documents, fake addresses, and non-existent zip codes to open an FTX account. He also established 64 subaccounts under the main account to circumvent FTX's collateral limits.

He then heavily bought another low-liquidity token, KNC, artificially driving up the price by simultaneously buying through multiple accounts, eventually controlling approximately 70% of KNC's circulating supply. With this, he artificially inflated the price, increased the nominal value of collateral, and exploited an aggregation calculation flaw in FTX's margin system. He dispersed the KNC holdings across multiple subaccounts, using the artificially inflated KNC as collateral to borrow funds, attempting to withdraw as much funds as possible before a price collapse. However, this time, a junior FTX staff member identified the flow of funds' correlation, recognized the connection to previous operations, and FTX promptly took action by freezing the accounts and implementing new margin trading restrictions.

FTX then gradually became aware of Meerun's pattern, but despite this, he still managed to withdraw $68 million successfully.

Criminal Network and Behind-the-Scenes Mystery

FTX's lawsuit documents not only accuse Meerun of market manipulation but also link him to a multinational organized crime group. These accusations include:

· Has connections to criminal networks in Poland, Romania, and Ukraine, involved in human trafficking and money laundering.

· Is associated with an Islamic extremist group, potentially involved in terrorist financing.

Facing these accusations, Meerun has always denied. He claims that his trades on FTX were fully compliant with the rules, even emphasizing that he suffered losses in the trades. He stated: "I have no ties to any organized crime network, nor have I ever sponsored extremism or terrorist activities."

Interestingly, according to @LouisOrigny, Meerun submitted a $12 million claim to FTX's bankruptcy creditors in 2024.

All I can say is, one fish, multiple dishes; let bro play smart...

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