Meerun stole $1.2 billion from FTX by exploiting the same loophole three times
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Meerun stole $1.2 billion from FTX by exploiting the same loophole three times
Great thieves keep it simple...
Navigating Web3 tides with focused insightsBy Nan Zhi, Odaily Planet Daily
Last week, a court filing from FTX revealed that a Mauritian citizen named Nawaaz Mohammad Meerun (referred to as Meerun) extracted $1.2 billion from the FTX exchange and Alameda Research over the course of a year—without ever leaving solid evidence behind.
First Appearance: Mysterious Whale Steals $450 Million
Meerun's first major move occurred in January 2021, when he targeted BTMX—a token with extremely low liquidity. Over two months, he continuously purchased BTMX on BitMax and FTX platforms, eventually acquiring approximately 50% of the total supply. Driven by Meerun’s buying pressure, BTMX surged from $0.03 to $3, an astronomical increase of 10,000%.
He then exploited a vulnerability in FTX's margin trading system, using the artificially inflated BTMX holdings as collateral to borrow hundreds of millions of dollars. He swiftly withdrew funds, transferring $450 million across multiple wallet addresses.
The lawsuit states: "Meerun clearly knew that once his manipulation ceased, BTMX’s price would collapse, requiring him to repay all 'borrowed' assets. However, Meerun never intended to comply with FTX’s rules."
Although BitMax warned FTX about suspicious trading activity, FTX management failed to act. While they eventually froze his account, they forgot to disable his withdrawal capability. After Meerun cashed out, some employees even attempted to shift the losses onto Alameda Research to cover up the incident.
Alameda Becomes Meerun’s ATM
After successfully manipulating BTMX, Meerun didn’t stop there. Instead, he shifted tactics—this time turning to short selling—and set his sights on another obscure token: Mobile Coin (MOB).
Meerun first established a short position on FTX representing around 10% of MOB’s total supply. This forced Alameda to take on the opposite side of those trades. To cover these short positions, Alameda was compelled to buy large quantities of MOB.
As Alameda bought aggressively over several weeks, MOB’s price skyrocketed by 750%, rising from $8 to $68. Alameda paid a significant premium. Once their buying slowed, the price rapidly collapsed. Ultimately, this trade cost Alameda roughly $1 billion—while Meerun walked away with another successful exit.
In August 2021, Meerun allegedly used new accounts and aliases to execute similar manipulation schemes involving illiquid tokens like BAO, TOMO, and SXP, profiting nearly $200 million before FTX noticed.
The KNC Incident: Final Attempt—Failure (Or Was It?)
Following repeated successes, Meerun turned his attention to the KNC token. He meticulously constructed a complex network of accounts, using stolen or forged KYC documents, fake addresses, and non-existent postal codes to open FTX accounts. Under one primary account, he created 64 sub-accounts to bypass FTX’s collateral limits.
He then heavily purchased KNC—a low-liquidity token—driving up its price through coordinated buys across multiple accounts. Eventually, he controlled about 70% of the circulating KNC supply, artificially inflating its value. Leveraging FTX’s flawed aggregated margin calculation system, he distributed his KNC holdings across sub-accounts and used the inflated tokens as collateral to borrow funds, attempting to withdraw as much money as possible before the price crashed.
This time, however, a junior employee at FTX detected patterns in the fund flows and recognized similarities to prior incidents. FTX promptly froze the accounts and introduced stricter margin trading controls.
Nonetheless, despite growing awareness of Meerun’s tactics, he still managed to withdraw $68 million.
Criminal Network and Shadowy Connections
FTX’s legal filings not only accuse Meerun of market manipulation but also link him to international organized crime networks. The allegations include:
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Connections with criminal organizations in Poland, Romania, and Ukraine, involved in human trafficking and money laundering.
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Links to Islamic extremist groups, potentially participating in terrorist financing.
Facing these serious accusations, Meerun has consistently denied all claims. He insists his trading activities on FTX were fully compliant with platform rules and even asserts that he suffered losses during the process. He stated: "I have no connection whatsoever to any organized crime network, nor have I ever funded 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—talk about getting multiple meals out of one fish… this guy really cracked the code…
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