Ripple-promoted token XRP dropped by more than 5% on Jan. 31 following reports that the network might have fallen victim to bad actors and lost an eye-watering $112.5 million.
Internet sleuth ZachXBT was the first to bring attention to the incident, claiming that 213 million XRP tokens had been drained from a massive wallet on the XRP Ledger blockchain in eight separate transactions. The XRP loot was subsequently laundered through at least six crypto exchanges including Binance, Kraken, HitBTC, MEXC, Gate, and OKX.
Ripple co-founder and Executive Chairman Chris Larsen, however, clarified in a post on X (formerly known as Twitter) that there had been a breach to his “personal XRP accounts,” but not to the San Francisco-based company itself. “We were quickly able to catch the problem and notify exchanges to freeze the affected addresses. Law enforcement is already involved.”
It’s unclear at publication time whether the funds are still in exchange custody. However, it seems as though Ripple accounts weren’t affected, thus suggesting that XRP holders’ funds are completely safe. That being said, this is arguably the biggest crypto-related hack of 2024 so far.
Ripple is currently mired in a lawsuit, which was initiated by the U.S. Securities and Exchange Commission (SEC) in December 2020 over claims of selling XRP tokens to U.S. retail customers on exchanges without first registering them as securities.
Larsen and Ripple CEO Brad Garlinghouse were directly named as defendants in the lawsuit, but they secured a major win in July 2023 when Judge Analisa Torres ruled that XRP was “not necessarily a security on its face”. Moreover, the SEC willingly dropped its lawsuit against Larsen and Garlinghouse last October.
XRP Price Dips After Hack
The revelation of the security breach had an immediate negative effect on XRP’s price. XRP, which was developed to enable banks and other financial institutions to move funds faster and at negligible costs, fell to as low as $0.4982 Wednesday. The sixth-largest crypto has since settled at just over $0.50 after clawing back some of the losses, according to CoinGecko data.
The news of the hack amplified the coin’s downtrend, which has already suffered an 18% slide over the last 30 days.
