What Happened in the $112.5 Million XRP Hack? Here’s What We Know

A Ripple co-founder was the target of a hack that drained $112.5 million in XRP tokens from several accounts.

Ripple is hot after news of a hack targeting the company’s address surfaced. According to a recent confirmation from Ripple co-founder and executive chairman Chris Larsen, $112.5 million worth of XRP was siphoned, not from Ripple’s wallet, but from Larsen’s personal wallets.

Yesterday, there was unauthorized access to a few of my personal XRP accounts (not @Ripple) – we were quickly able to catch the problem and notify exchanges to freeze the affected addresses. Law enforcement is already involved. https://t.co/T3HtKSlzLg

— Chris Larsen (@chrislarsensf) January 31, 2024

Larsen’s statement came as a response to an earlier post from famous pseudonymous on-chain detective ZachXBT. ZachXBT said that Ripple was potentially exploited for 213 million XRP tokens, equivalent to around $112.5 million.

The analyst added that the hacker’s address moved the stolen tokens across eight crypto exchanges, including MEXC, Gate, Binance, Kraken, OKX, HTX, and HitBTC.

Ripple Wallets Are Safe

Larsen also told media that Ripple wallets’ were fine, saying they were never compromised. He said a significant portion of the stolen funds were frozen, and the cops were going after the rest. Exchanges are happy to work with law enforcement these days, given how far up their collective *** the US government is with regulations.

A Series of XRP Exploits

Last month, $15 billion worth of XRP tokens, accounting for nearly half of the XRP circulating supply, were also at risk in a hacking attempt on the Bitfinex exchange. According to Bitfinex CTO Paolo Ardoino, the hacker tried to conduct the hack through a “Partial Payments Exploit.” Fortunately, Bitfinex quickly flagged this attempt, so the hacker failed to proceed.

XRP dropped below $0.49 briefly after the hack was discovered. The crypto is trading at around $0.50 at current prices, down 1.4% in the last 24 hours, per CoinGecko’s data. Following the news, the entire crypto market also took a hit, with Bitcoin falling below $43,000, Ethereum dropping under $2,300, and Solana down below $98.

Far From A Rally

Throughout the recent crypto rally in December, XRP was among the coins that showed little surge. Compared to Injective or Solana, which strongly increased during the same period, the price of Ripple was flat.

One of the main reasons behind this underperformance is the legal battle between the US Securities and Exchange Commission (SEC) and Ripple Labs.

Following a court verdict last year, which ruled that XRP is a non-security in retail transactions, the SEC filed a letter of intent to request an interlocutory appeal to the case’s summary judgment. However, the SEC’s motion was rejected.

While the court verdict didn’t favor the agency, it was not a complete failure for the SEC. The SEC and Ripple will continue to have another court hearing in April this year to resolve some of the case’s issues, which could create an opportunity for the SEC to turn the tables.

The parties involved in the lawsuit must submit to the court documents for the proceedings in preparation for the hearing. The deadline to submit evidence in the SEC and Ripple lawsuit is February 12.

XRP is Going Nowhere

Ripple may face high price volatility as the court hearing approaches.

But a potential case settlement in 2024 could be a game-changer for Ripple’s price and the crypto market. After Ripple’s partial victory last year, XRP skyrocketed to nearly $1.00. The coin was also re-listed on many crypto exchanges.

Apart from legal issues, Ripple has formed several major partnerships with major banks like Bank of America or Santander Bank and institutions worldwide to facilitate cross-border payments. The firm expects to onboard more US institutions upon the latest court ruling.

While not decentralized in the way Bitcoin is, XRP offers value. One wonders if all this pressure would be put on an asset that was worthless – or if the US financial has designs on slurping up Ripple Labs on the cheap while markets dither over a silly lawsuit.