XT Exchange Suspends Withdrawals After $1.7M Hack

Cryptocurrency exchange XT.com, temporarily suspended withdrawals after falling victim to a cyberattack. The hack, which occurred on November 28, resulted in the theft of $1.7 million worth of digital assets. 

Hack Details and Response

The hack was flagged by blockchain security firm PeckShield, which identified suspicious activity related to XT.com's wallet. According to their analysis, the stolen funds were converted into 461.58 Ethereum (ETH) and transferred to an external wallet. 

In an official statement, XT.com acknowledged the "abnormal transfer of platform wallet assets" and emphasized that the compromised wallet did not affect user funds. Despite the damage, the company has vowed to investigate the incident fully and take the necessary steps to ensure such vulnerabilities are addressed.

XT.com has reassured its users that its reserve system, which is designed to hold 1.5 times more assets than what users have deposited, remains intact. This mechanism is intended to cover any potential losses, thereby offering customers some peace of mind. The exchange also revealed plans to introduce a Merkel Tree Asset Proof System in December, a move aimed at increasing transparency and building trust with its user base.

Interestingly, despite the hack, the XT token, which is the exchange’s native asset, saw a 7% increase in value over 24 hours. This surge is somewhat unusual for a platform that just suffered a major security breach. Analysts speculate that the rise in XT token price could be attributed to its limited trading on other exchanges, which may have shielded it from the broader market reaction.

The Broader Impact on Cryptocurrency Exchanges

This breach is not an isolated incident but part of a growing trend of cyberattacks targeting crypto exchanges. In September 2024, other exchanges like BingX and Indodax were also victims of hacks, losing $43 million and $22 million, respectively. 

Recent reports from Chainalysis show that overall illicit activity in cryptocurrency markets has decreased in 2024. Chainalysis data indicates that illegal transactions in crypto markets have dropped by 19.6% year-to-date, from $20.9 billion in 2023 to $16.7 billion by mid-2024. However, certain types of crypto-related criminal activity, including exchange hacks, continue to be a major concern.

XT Exchange’s Position in the Market

Launched in 2018 and registered in Seychelles, XT.com is a centralized exchange offering trading for over 1,000 digital currencies. As of the latest data, the platform boasts a daily trading volume of $3.1 billion. The exchange has approximately $47.7 million in reserves.