HTX experiences $258 million outflow post-hack
HTX, the digital-asset trading platform associated with Chinese-born crypto mogul Justin Sun, has witnessed a substantial net outflow of $258 million since resuming operations after a significant security breach.
According to Bloomberg, data from DefiLlama indicates that the outflow occurred between the exchange’s restart on Nov. 25 and Dec. 10, signaling unease among some clients following last month’s cyberattack. In November, HTX reported a loss of $30 million in crypto tokens due to the breach, prompting a temporary suspension of withdrawals and deposits.
Towards the end of last month, the platform re-enabled withdrawal services for major cryptocurrencies, gradually bringing the exchange back to full service, supporting withdrawal of all digital assets.
Multiple hacks
Justin Sun is also associated with the Poloniex exchange and the HECO Bridge, a network established by HTX for blockchain transfers. Both Poloniex and HECO fell victim to hacks in November, resulting in the theft of approximately $200 million in crypto. It’s worth noting that hackers had previously stolen $8 million from the HTX platform in September.
HTX, which was formerly known as Huobi up until a business rebrand in September, boasts an average trading volume of $1.5 billion in the past 24 hours, securing its position as the fifteenth largest exchange when measured in terms of trading volume.
Increased vigilance
In the wake of several high-profile crypto platform failures in 2022, digital-asset investors are increasingly vigilant about monitoring flows and reserves at virtual currency exchanges. In particular, that trend gained momentum after the FTX platform’s collapse last year due to fraud.
November turned out to be the most damaging month this year so far in terms of platform digital asset theft. Exit scams and exploits encountered during the month totaled a staggering $363 million in losses.
In October, the UK’s Financial Conduct Authority (FCA) included HTX, alongside KuCoin, on a warning list, due to their promotion of services in the UK, without having obtained the required regulatory approvals.
A third of reserves in Bitcoin
DefiLlama data reveals that Bitcoin constitutes the largest portion of HTX’s reserves, accounting for approximately 33%. Tron’s TRX token, launched by Sun in 2017, represents around 32% of the reserves. HTX’s native exchange coin, HT, makes up 14%, followed by a Sun-backed token named stUSDT at 12%.
In August, Travis Kling, Founder of Ikigai Asset Management, had this warning relative to Sun and HTX:
”Justin Sun is a criminal. There’s a hole in Huobi, a hole in TUSD and a hole in Tron DeFi. Act accordingly.”
TRX, at the center of U.S. fraud allegations against Sun, prompted a March lawsuit by the Securities and Exchange Commission (SEC), accusing him and his firms of market manipulation to inflate the token’s trading activity. Sun dismissed the suit on the X social media platform back in March, stating that it “lacks merit.” On Sunday, Sun claimed that the Tron blockchain network which he founded had reached a new milestone of 200 million users.
Despite security firm BlockSec reporting the recovery of the $8 million stolen in September, hackers still appear to control the $30 million taken last month. The ongoing situation raises concerns about the security measures and resilience of HTX in the face of persistent cyber threats.
