Blockchain investigator ZachXBT uncovered a $3 million XRP theft linked to a sophisticated phishing scheme, affecting a US-based cryptocurrency holder’s Ellipal wallet, with funds laundered via a Cambodia-based financial group.
The incident raises concerns over wallet security practices, impacting XRP market dynamics and highlighting risks of recovery phrase misuse.
ZachXBT Uncovers $3 Million XRP Phishing Theft
ZachXBT mapped and publicly exposed the route of the stolen funds. Ellipal wallet provider stated that their offline products remain secure. The victim mistakenly imported their recovery phrase, exposing funds to the phishing attack. Here’s what ZachXBT had to say:
“The victim thought they were using an Ellipal cold wallet, but had actually imported their recovery phrase into a hot wallet, which exposed the funds online.” – Source
$3 Million XRP Theft Spurs Exchange Alerts
The theft involved 1.2 million XRP tokens, converted to other assets through cross-chain swaps. Binance’s response was swift, freezing stolen XRP following theft reports. Community warnings emerged, urging careful management of recovery phrases. Exchange responses were swift, yet the stolen funds largely bypassed major channels.
Potential financial and regulatory concerns arise as the funds moved through sanctioned entities like Huione. FinCEN’s final rule highlights implications for US operations. Historical data suggests similar events can result in short-term price declines for affected tokens. Exchanges may face challenges recovering assets.
Historical Hacks Highlight XRP’s Vulnerability
Similar past events, including a significant 2025 hack of Chris Larsen’s wallets, highlight recurrent vulnerabilities. XRP remains a frequent target due to its liquidity and network. Cross-chain swaps complicate recovery and regulation efforts.
Experts from Kanalcoin suggest future vigilance and improved wallet security practices could mitigate such occurrences. Historical trends indicate complex laundering challenges, with funds passing through multiple chains, impeding regulatory action.
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