Investors are swiftly withdrawing their assets from the cryptocurrency exchange HTX (formerly Huobi) after the exploit on November 22 that forced the exchange to halt services and incurred a loss of $30 million. Between November 25, when HTX resumed services, and December 10, the exchange witnessed a significant net outflow of $258 million, as reported by DefiLlama.
Justin Sun-Affiliated Entities Face Fourth Hacking Incident in Two Months
Data from DefiLlama has revealed that HTX's reserves consist of 32.3% Bitcoin and 31.8% Tron, the native currency of the Tron network launched by Sun in 2017. As of the latest data, HTX ranks as the 16th largest cryptocurrency exchange by daily trading volume, totaling $1.6 billion in the last 24 hours according to CoinMarketCap.
Following the restart on November 25, Sun assured affected HTX users of full compensation for the losses from the hot wallet and stated that an investigation was in progress. Over the past two months, entities linked to Sun, including HTX, Poloniex, and the HECO bridge, have faced four hacking incidents.
HTX Offers 'White-Hat Bonus' to Identified Hacker
Finance Magnates reported that HTX had encountered a significant hack on September 24, resulting in the loss of $7.9 million in digital assets, as revealed by blockchain analytics platform Cyvers. Uniquely, the exchange claimed to have identified the hacker and made an unconventional offer.
In a message from a Huobi hot wallet, the exchange proposed a "white-hat bonus" for the hacker, allowing them to retain 5% of the stolen funds if they returned the remaining 95%. The hack involved a transfer of 4,999 Ether (approximately $7.9 million) from a suspected Huobi hot wallet to an address without prior transaction history.
HTX faced challenges, including regulatory scrutiny and reported detentions in China. Despite these challenges, the exchange emphasized community involvement in its rebranding, allowing users to participate in decisions about listed assets. Regulatory compliance efforts included securing approval from the Financial Services Commission for the British Virgin Islands and facing regulatory intervention in Malaysia.
On November 22, HTX's HECO Chain bridge experienced a significant breach, with hackers compromising HECO and transferring at least $86.6 million to suspicious addresses. The most substantial exploit was the breach of $100 million from Poloniex exchange on November 10, attributed to a compromise of private keys.
Notably, November marked the worst month for crypto theft in 2023, with hackers and malicious actors absconding with $363 million in ill-gotten digital assets.
