Market Plunges as 200M XRP Tokens Disappear in Ripple Hack, Prompting Sell-Off
In the midst of the turbulent world of cryptocurrency, Ripple’s XRP suffered a major setback after the wallet belonging to one of its co-founders, Chris Larsen, was hacked. This shocking revelation, brought to light by cybersecurity expert ZachXBT, not only resulted in the disappearance of over 200 million XRP tokens but also exposed significant security vulnerabilities in the crypto market.
Following the breach, blockchain analytics firm Kaiko reported a significant sell-off of nearly 100 million XRP tokens, primarily on exchanges like Binance and OKX. Despite the efforts of these platforms to freeze the hacker’s accounts, the damage had already been done, leading to a noticeable drop in XRP’s market capitalization.
The report dives into XRP’s cumulative volume delta (CVD), a metric that indicates the number of participants buying and selling the cryptocurrency. On January 30, despite a positive CVD as users acquired more XRP, particularly on Binance, the price of the coin still fell by 4.58% due to market turbulence. Struggling to maintain its position above the critical support level of $0.55, XRP faced bearish pressure, potentially signaling a downward trajectory towards $0.37 as an immediate consequence of the hack.
Interestingly, despite the initial buying signal, XRP’s CVD experienced a sharp decline, especially on exchanges like Binance and OKX, where users continued to offload their XRP holdings. This decline persisted until ZachXBT shed light on the hack affecting Chris Larsen, Ripple’s chairman.
The hackers targeted Larsen’s wallet, transferring the stolen XRP to centralized exchanges like Binance, HTX, OKX, MEXC, Kraken, and Gate.io. A majority of the stolen XRP was converted into other cryptocurrencies, causing panic selling and a significant drop in XRP’s CVD.
There may still be hope, albeit limited. Despite a slight recovery on February 2, XRP’s CVD remained below average, with Binance and OKX experiencing the most substantial sales. Binance was able to freeze $4.2 million worth of XRP linked to the hack. However, ZachXBT revealed that the hackers successfully sold most of the stolen XRP, with massive Bitcoin withdrawals totaling $73.3 million, primarily from HTX, Gate.io, and Kraken.
ZachXBT suggests that these withdrawals include XRP assets that were converted during the Larsen hack. Later on, some of these funds from Kraken were routed to a Bitcoin mixer, showcasing the ripple effect of the hacking incident on XRP and the broader cryptocurrency market.