Crypto exchange HTX drained of millions in weekend hack
- Huobi fell victim to a cyberattack resulting in the theft of $7.9 million in cryptocurrencies.
- Despite the breach, Huobi’s native token only saw a minor price decline of 0.61%.
HTX [HT], formerly Huobi, a prominent Hong Kong-based centralized cryptocurrency exchange, faced a cyber-attack on 24 September that resulted in significant losses. As reported by blockchain analytics platform Cyvers, the hacker managed to steal approximately $7.9 million worth of cryptocurrencies.
Realistic or not, here’s HT’s market cap in BTC terms
Another one bites the dust
During this attack, a Huobi hot wallet took an unusual step. It sent a message to the attacker in Chinese, expressing awareness of the attacker’s identity and offering a “white-hat bonus” of 5% of the stolen funds if the remaining 95% was returned.
?Red Code?Yesterday, our ML-powered system detected a suspicious transaction involving @HuobiGlobal and @HTX_Global.
Despite our attempts to reach out, we received no response. An EOA received 5K $ETH $7.9M from @HuobiGlobal's hot wallet.
? This morning, we spotted… pic.twitter.com/3oqHhAVi8P
— ? Cyvers Alerts ? (@CyversAlerts) September 25, 2023
This hot wallet, which sent the message, was identified by blockchain analytics platform Arkham Intelligence as belonging to Huobi. Furthermore, this assertion was supported by information found on a Huobi support page.
Analyzing Huobi’s cryptocurrency holdings, lookonchain’s data revealed that HTX currently holds a substantial $2.96 billion in assets. This included notable holdings like 29.65K BTC valued at approximately $779.7 million and 9.16 billion TRX worth around $775.6 million.
Justin Sun addresses the public
In response to the security breach, Justin Sun, an investor in Huobi, took to Twitter to address the situation. He assured the cryptocurrency community that HTX managed to cover the losses incurred during the attack and has effectively resolved all related issues.
He emphasized that user assets were secured through the Secure Asset Fund for Users (SAFU) and that the exchange was operating normally.
HTX @HTX_Global has suffered a loss of 5,000 #Eth ($8 million USD) due to a hacker attack. HTX has fully covered the losses incurred from the attack and has successfully resolved all related issues. All user assets are #SAFU and the platform is operating completely normally.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) September 25, 2023
Justin Sun also provided perspective on the scale of the breach. He said,
“$8 million represents a relatively small sum in comparison to the $3 billion worth of assets held by our users. It also amounts to just two weeks’ revenue for the HTX platform.”
Additionally, Sun issued a stern warning to the hacker. He stated that if the stolen funds were not returned within seven days, Huobi would involve law enforcement authorities for further action, including prosecution of the attacker.
Skepticism remains high
Despite Sun’s attempts to restore confidence in Huobi, there were lingering doubts within the cryptocurrency community regarding the exchange’s financial stability.
Notably, Adam Cochran, the founder of Cinneamhain Ventures, expressed concerns about Huobi’s solvency.
Cochran highlighted discrepancies between Huobi’s claims and data from Defillama. The discrepancy was related to the amount of assets held, notably in ETH and USDT.
He suggested that Justin Sun might be manipulating user assets by converting USDT into stUSDT, using them to support JustLend, and engaging in other activities.
Oh btw Huobi is probably insolvent again.
Claims to have $200M in ETH, defillama shows less than $113M even if you add in weth and steth.
Claims users hold $624M in USDT. But there is only $119M USDT in the exchange. pic.twitter.com/zghTpGRBzn
— Adam Cochran (adamscochran.eth) (@adamscochran) September 25, 2023
Cochran estimated that this could potentially lead to a debt of approximately $2.4 billion in user assets spread across Huobi and the Tron ecosystem, all without the users’ awareness.
Is your portfolio green? Check out the HT Profit Calculator
Interestingly, despite the significant security incident, HT, Huobi’s native token, did not experience a substantial price drop. In the 24 hours following the breach, its price only decreased by 0.61%.
However, data from Santiment indicated a notable decline in weighted sentiment for HT. This suggested that negative comments regarding the token have become prominent on social media platforms.