XT Exchange Suspends Withdrawals After $1.7M Crypto Hack

XT Exchange, a Seychelles-based cryptocurrency platform, has suspended all withdrawals after identifying an abnormal transfer from its wallet. The incident, reported on November 28, involves a suspected $1.7 million breach, raising significant security concerns.

The platform initially attributed the withdrawal halt to “wallet upgrade and maintenance.” However, later statements confirmed that it was because of unauthorized asset movements. Blockchain security firm PeckShield reported that the stolen funds were converted into 461.58 ETH.

PeckShield Flags Suspicious Activity

PeckShield disclosed that the stolen funds were spread across Ethereum, Binance Smart Chain, and Optimism. Since the stolen assets were promptly swapped and bridged to Ethereum, the recovery became more challenging. 

XT Exchange addressed the situation by acknowledging the transfer but emphasized that user funds remain unaffected. The exchange clarified that the impacted assets belong to its reserves and not to individual account holdings.

XT Exchange Prioritizes User Assurance

XT Exchange, established in 2018, facilitates trading for over 1,000 cryptocurrencies and records daily trading volumes exceeding $3.4 billion. After the recent hack, it reassured its 7.8 million registered users that their funds were secure. The platform highlighted its reserve policy, which maintains reserves 1.5 times greater than user assets to ensure full coverage. The exchange also plans to enhance transparency by launching a Merkle Tree Asset Proof System by mid-December.

This system aims to provide users with greater visibility into the platform’s reserves. It will allow users to independently verify the sufficiency and security of their assets on the platform. XT Exchange also stated that it is committed to taking action to investigate the breach and prevent further hacks.

Growing Threats to Centralized Exchanges

This incident adds to a troubling trend of security breaches targeting centralized cryptocurrency exchanges. In September, BingX and Indodax experienced significant losses of $43 million and $22 million, respectively. These recurring hacks highlight the vulnerabilities of centralized platforms and the need for stronger security measures.

While the investigation continues, the XT Exchange remains focused on ensuring user funds are safe and implementing measures to prevent future breaches. Users are advised to monitor official updates for developments regarding the situation.