Ellipal, a prominent name in the crypto hardware space, is making a dramatic retreat from the hot wallet market following a high-profile XRP theft that raised new alarms about digital asset safety.
The company confirmed it will end all hot wallet operations and shift its focus entirely to developing and supporting offline storage devices.
A Strategic Retreat Toward Offline Security
Rather than continuing to split its attention between mobile and hardware products, Ellipal is doubling down on what it considers its core strength – cold wallet technology. The firm announced that hot wallet services will officially wind down by October 31, after which all development resources will be directed toward enhancing offline crypto protection.
Official Announcement from ELLIPAL
At ELLIPAL, we remain dedicated to delivering the highest level of crypto security through our cold wallet technology. To stay true to this mission, we are now focusing entirely on cold wallet innovation and service.
To avoid any confusion for… pic.twitter.com/B9eGiI7Hi9
— ELLIPAL (@ellipalwallet) October 23, 2025
In its notice to users, Ellipal urged those still holding assets in its mobile wallets to migrate funds to new wallet addresses as soon as possible. The company added that its customer service teams will remain active during the transition to prevent potential losses.
Ellipal framed the decision as a necessary evolution, citing the growing sophistication of cyberattacks targeting connected wallets and exchanges. The company stressed that “offline security must take precedence over convenience” in a market increasingly defined by high-stakes exploits.
The XRP Breach That Changed Everything
The pivot follows an alleged theft of roughly $3.05 million in XRP, which thrust Ellipal into the spotlight earlier this month. According to blockchain researcher ZachXBT, the attacker exploited weaknesses in a user’s setup, executing more than 120 transactions that converted Ripple assets into Tron-based tokens via the Bridgers exchange on October 12.
1/ A video went viral on YT this week after a US based victim lost $3.05M (1.2M XRP) from their Ellipal wallet.
Here’s the tracing of where the stolen funds ended up and the biggest takeaways for similar thefts. pic.twitter.com/Gyw0OWjts4
— ZachXBT (@zachxbt) October 19, 2025
By mid-October, those funds were traced through over-the-counter trading desks connected to Huione, a Southeast Asian money-laundering network previously flagged by U.S. authorities. The entire chain of transactions highlighted the speed and scale at which stolen crypto can be moved and obscured across blockchains.
Rethinking Wallet Security in 2025
The Ellipal incident reignited debate over how wallet providers balance usability and security. Hot wallets – apps that connect directly to the internet – offer faster transactions but remain exposed to malware, phishing, and remote exploits. Cold wallets, by contrast, isolate private keys from online environments, significantly reducing the attack surface.
Analysts say Ellipal’s decision could set a precedent for other wallet companies under increasing pressure to prove that their products are safe in a landscape of escalating threats. With digital assets now representing billions in individual and institutional holdings, any perception of vulnerability can be devastating for trust.
A Turning Point for Custody Providers
For Ellipal, this marks both an end and a beginning. By abandoning hot wallet services altogether, the company is repositioning itself as a purist in crypto security – focused solely on devices that operate completely offline. Industry observers note that this move could help restore confidence among users rattled by recent exploits.
As digital asset thefts grow more sophisticated, Ellipal’s shift signals a broader realization in the crypto space: convenience may no longer justify exposure. In 2025’s security-conscious market, going cold might be the only way to stay safe.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/major-crypto-wallet-service-shuts-down-after-3m-xrp-theft/