Kaiko Insights: XRP Sales on Cryptocurrency Exchanges After Ripple Hack
In a tumultuous week for the cryptocurrency market, Ripple’s XRP suffered a major setback when the co-founder’s wallet was hacked, resulting in the disappearance of over 200 million XRP. Cybersecurity analyst ZachXBT uncovered this revelation, leading to an increase in the sale of XRP tokens and exposing significant security vulnerabilities in the crypto market.
According to blockchain analytics firm Kaiko, the aftermath of the breach resulted in a net sell-off of nearly 100 million XRP, primarily on exchanges like Binance and OKX. Despite attempts by exchanges to freeze the hacker’s accounts, substantial damage was done, causing a noticeable decline in XRP’s market capitalization.
Kaiko’s report focuses on XRP’s cumulative volume delta (CVD), a metric that indicates the number of market participants buying and selling XRP. On January 30, there was a positive CVD as users purchased more XRP, particularly on Binance. However, despite this, XRP’s price dropped by 4.58% due to market volatility. Struggling to stay above the critical support level of $0.55, XRP faces bearish pressure, potentially indicating a downward trend towards $0.37. This decline reflects the immediate impact of the hack.
Surprisingly, following the buying signal, XRP’s CVD sharply declined, primarily on exchanges like Binance and OKX, where customers continued to sell their XRP holdings. The decline persisted until ZachXBT drew attention to the hack affecting Ripple’s chairman, Chris Larsen. The hack targeted Larsen’s wallet, and the funds were transferred to centralized exchanges such as Binance, HTX, OKX, MEXC, Kraken, and Gate.io. Most of the stolen XRP was converted into other cryptocurrencies, causing panic selling and a significant drop in XRP’s CVD.
Despite a slight recovery on February 2, XRP’s CVD remained below average, with Binance and OKX experiencing the largest sell-offs. Binance managed to freeze $4.2 million worth of XRP connected to the hack. However, ZachXBT disclosed that the hackers successfully sold most of the stolen XRP, withdrawing a substantial amount of Bitcoin totaling $73.3 million, primarily from HTX, Gate.io, and Kraken.
ZachXBT further suggests that these withdrawals include XRP assets converted during the Larsen hack. Later, some of the Kraken funds were routed through a Bitcoin mixer. This series of events illustrates the impact of the hacking incident on XRP and the wider crypto market.