XT Exchange Suspends Withdrawals Amid $1.7M Hack Investigation

Highlights:

• XT Exchange suspended withdrawals after detecting an abnormal transfer of $1.7 million in assets from its platform wallet.
• Blockchain security firm PeckShield reported that the stolen funds were converted into 461.58 ETH and are in a specific Ethereum address.
• XT Exchange assures users their funds remain secure, with reserves 1.5 times greater than user assets, and plans to enhance transparency.

XT Exchange, a Seychelles-registered cryptocurrency platform, has suspended all withdrawals after detecting a suspicious transfer. On November 28, the exchange announced the suspension, citing “wallet upgrade and maintenance.” However, shortly after, the platform acknowledged an “abnormal transfer of platform wallet assets” involving approximately $1.7 million.

🚨 XT Statement on Abnormal Transfer of Platform Wallet Assets 🚨

Today, XT detected an abnormal transfer from our platform wallet. Rest assured, this will not affect our users. 💪

🔒 We always maintain reserves 1.5x greater than user assets to ensure maximum security.

Our… pic.twitter.com/SdEL75PxZF

— XT Exchange (@XTexchange) November 28, 2024

Unauthorized movements of funds were detected by the exchange from its wallet address 0xdb3d…fvf7. This resulted in immediate action to prevent further losses. About $1 million worth of 12 cryptocurrencies was allegedly stolen via the incident, XT Exchange announced.

Stolen Funds Converted to Ethereum

Blockchain security firm PeckShield said the suspected hacker cashed out the stolen assets and transferred them into 461.58 Ether (ETH). Now, the funds are sitting in an Ethereum address that is linked to the hacker. According to PeckShield’s data, the hacker quickly swapped and bridged the assets to the Ethereum network after the breach.

#PeckShieldAlert Our community member has detected that @XTexchange appears to have been hacked for ~$1.7 million worth of cryptos.
The hacker has swapped the stolen funds for 461.58 $ETH & sit in 0xB43f…8F83 pic.twitter.com/bwINPguXlZ

— PeckShieldAlert (@PeckShieldAlert) November 28, 2024

Additionally, the hacker’s actions are of concern to the crypto community. Stolen funds are quickly convertable and transferable and present issues for recovery efforts. To accommodate this, security experts closely track the situation, hoping to identify and possibly freeze the assets.

XT Exchange Reassures Users and Plans Transparency Measures

XT Exchange assured their users’ funds remained secure even after the breach. It stressed that the affected assets are part of its reserves, not user holdings. “Rest assured, this will not affect our users,” the exchange stated. In addition, XT Exchange holds reserves 1.5 times that of user assets to provide the highest possible security.

The exchange is also conducting an urgent investigation into the incident. They are working round the clock to find a way to eliminate any other potential risks. XT Exchange aims to launch a Merkle Tree Asset Proof System by mid-December to improve transparency and user trust.

Their goal is to increase transparency on the amount of assets held in the platform’s reserves as well as the platform’s overall financial health. Launched in 2018, XT Exchange allows trading of over 1,000 digital currencies. It has 7.8 million registered users and declares daily trading volumes of around $3.4 billion. CoinGecko data shows that XT Exchange currently has almost $48 million in exchange reserves.

With the Merkle Tree system, XT Exchange seeks to improve transparency while allowing users to verify their assets independently.  Therefore, the security and sufficiency of the exchange’s holdings can be verified by the users. According to XT Exchange, these measures will bolster security processes and prevent future incidents.

Industry Concerns and Recent Hacks

The incident at XT Exchange adds to a series of recent security breaches affecting cryptocurrency exchanges. In September, platforms like BingX and Indodax suffered significant losses due to hacks. BingX reportedly lost $43 million, while Indodax faced a $22 million breach. These events highlight the ongoing challenges in securing digital assets within centralized exchanges.

Enhanced security measures and transparency are essential to maintaining user confidence. XT Exchange’s proactive response and commitment to improving security are positive steps in addressing these concerns.