Cyberattack drains $112 million in XRP from Ripple co-founder’s accounts
On Tuesday, hackers targeted personal XRP accounts linked to Ripple co-founder and executive chairman Chris Larsen, resulting in the theft of approximately 213 million XRP or $112 million.
Larsen wrote on his X (previously Twitter) account, “There was unauthorized access to a few of my personal XRP accounts (not Ripple) — we were quickly able to catch the problem and notify exchanges to freeze the affected addresses. Law enforcement is already involved.”
Larsen made the announcement shortly after crypto security expert ZachXBT identified the hack on source address “rJNLz3A1qPKfWCtJLPhmMZAfBkutC2Qojm” and reported the incident on X. He tracked the coins and found the perpetrators attempting to launder the stolen funds through various exchanges, including MEXC, Gate.io, Kraken, and Binance to cover their tracks. Some of the exchanges have frozen the funds in response to requests from Larsen and authorities.
“We are aware of the incident. We have an incident response capability and undertake a proactive review of open source to identify incidents such as this, engage with victims, and prevent Kraken from being used in this way,” Kraken spokesperson Megan Thorpe said in a statement to TechCrunch.
According to on-chain data from XRPScan, the hacked wallet is named “Ripple (50),” and was activated in 2018 by another wallet, “~FundingWallet1.” The latter was activated by Larsen’s account in 2013, around one month after he created his personal account, ~chrislarsen.
Ripple (XRP) is the native token of the XRP Ledger and is currently the sixth-largest cryptocurrency by market capitalization. Ripple Labs, the company behind the network, leverages XRP to power tools like RippleNet, its cross-border payments platform designed for financial institutions. Ripple Labs spokesperson Stacey Ngo clarified that the company’s systems were not affected by the hack.
Following the hack, some XRP community members called for increased transparency, urging Ripple co-founders to disclose their crypto wallets and XRP holdings. Others, like podcast host Tony Edward, suggest that Chris Larsen distances himself from Ripple to mitigate reputational damage.
This incident represents the largest cryptocurrency theft of 2024 and the 20th historically, according to Rekt, a website tracking Web3 and crypto breaches. Crypto security firms estimate hackers made off with roughly $2 billion in stolen crypto last year alone.
It appears @Ripple was hacked for ~213M XRP ($112.5M)
So far the stolen funds have been laundered through MEXC, Gate, Binance, Kraken, OKX, HTX, HitBTC, etc pic.twitter.com/HKGYsLQeMv
— ZachXBT (@zachxbt) January 31, 2024
XRP price plummets
XRP’s price dipped over 5.0 percent on Wednesday following reports of the hack. Although it did not affect the network, the incident caused the token to drop from $0.525 to its current price of $0.497, according to CoinDesk data.
The price drop triggered over $4 million in liquidations of leveraged positions, primarily long positions worth around $3.8 million being wiped out.
In crypto derivatives, liquidations occur when trades are automatically closed due to insufficient funds to cover losses. This happens when market movements go against the trader’s bet, causing their initial deposit or margin to run out.
According to Coinglass data, the past 24 hours saw a significant amount of liquidations in the cryptocurrency market, totaling $150 million. The majority of these liquidations were long positions, meaning traders who bet on rising prices, with $113 million wiped out. Short positions, which bet on falling prices, accounted for the remaining $36 million in liquidations.
XRP’s recent decline is also tied to the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC). Despite a temporary boost from a positive ruling, caution among traders persists, possibly awaiting more legal clarity before re-entering the market. This uncertainty has driven investors toward other tokens like Bitcoin, Ethereum, and Solana.
Increased market volatility, substantial selloffs, and whale activities also added to the apprehension within the community.
Angel Marinov is the Managing Editor at Coinlabz. With extensive knowledge of crypto payments and blockchain use cases, Angel is a trusted source of accurate and timely information