According to ChainCatcher, an interim report on the control failures of FTX and related businesses, prepared by FTX interim CEO John Ray III and an external legal team, was released recently. The report discussed key areas of control failures by FTX's former management team, including management and governance, finance and accounting, digital asset management, information security, and network security.

The report states that "the FTX team keeps almost all crypto assets in hot wallets," which do not require multiple signatures to transfer assets. Any employee can transfer assets worth millions of dollars, and the wallet keys are not well protected.

For example, the private key of a wallet with more than $100 million in "Ethereum assets" was stored in unencrypted plain text and easily accessible. In addition, the private keys of additional digital assets worth billions of dollars were stored in AWS password managers, and "many FTX team employees" could access and transfer these assets at any time. (Source link)