HTX Struggles with Massive Withdrawals in Wake of Recent Hack Incident

Key Points:

  • HTX faces significant client withdrawals after $258M post-hack outflow.
  • Justin Sun’s linked platforms experience repeated security breaches.
  • HTX’s ongoing struggle to recover $30 million in stolen funds.

HTX, the cryptocurrency exchange previously known as Huobi and linked to Chinese digital currency entrepreneur Justin Sun, has witnessed a significant financial exodus. Since resuming operations post a notable hack in November, the platform has experienced a staggering $258 million net outflow. This financial movement, spanning from November 25 to December 10, was highlighted by data from DefiLlama, underscoring the unease among clients following the November security breach.

HTX Struggles with Massive Withdrawals in Wake of Recent Hack Incident
HTX Struggles with Massive Withdrawals in Wake of Recent Hack Incident. HTX Net Outflows, Image By: DefiLlama

The exchange lost crypto tokens valued at approximately $30 million during the attack, leading to a temporary halt in withdrawals and deposits. Despite HTX’s commitment to investigating the incident and promising full reimbursement for losses from their hot wallets, apprehensions persist. The crypto community remains watchful, particularly considering the recent history of breaches associated with Justin Sun.

Repeated Security Breaches Raise Concerns

Sun, whose affiliations extend to HTX, Poloniex, and Heco Bridge, is at the center of heightened skepticism. The latter two platforms also suffered security breaches in November, cumulatively resulting in around $200 million in stolen cryptocurrencies. Notably, the Heco Bridge alone saw a drain of $86 million. These consecutive incidents have fueled concerns over a potential exit scam within the crypto circles.

Adding to the complexity is the TRX token, a significant asset of HTX initiated by Sun, now under scrutiny following allegations of fraud. Earlier this year, the U.S. Securities and Exchange Commission (SEC) accused Sun and his associated companies of market manipulation, casting further doubt on the integrity of these platforms.

With an average daily trading volume of $1.6 billion, digital asset investors closely monitor HTX’s situation. The composition of the exchange’s reserves, primarily in Bitcoin and TRX, raises questions about these platforms’ security measures and overall reliability in the digital asset domain.

Attempts to Recover Lost Funds Ongoing

The response from HTX to the breach includes efforts to recover the stolen funds. Security firm BlockSec reported that the exchange was able to reclaim $8 million stolen in a separate incident in September. However, the more recent breach involving $30 million remains unresolved, despite HTX offering a 5% bounty for information leading to the recovery of these funds.

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