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HTX crypto exchange faces massive outflows post $30M exploit

TL;DR

  • Security breaches erode trust, leading to massive outflows.
  • High exposure to Bitcoin and Tron highlights vulnerability.
  • Ongoing security issues may harm HTX’s standing.

In the wake of a major security breach in late November, crypto exchange HTX, formerly known as Huobi, has experienced significant capital outflows, with investors withdrawing more than $258 million from the platform. This comes after the exchange suffered a $30 million exploit that forced it to temporarily suspend its services.

Outflows surge following exploit

Between November 25th, when HTX resumed its services after the exploit, and December 10th, data from DefiLlama reveals that the exchange witnessed a substantial net outflow of funds, marking a concerning trend for the platform. The incident has raised questions about the security measures in place and investor confidence in the exchange.

HTX’s reserves, as reported by DefiLlama, consist of approximately 32.3% in Bitcoin and 31.8% in Tron (TRX), which is the native currency of the Tron network founded by Justin Sun in 2017. These figures underscore the significance of the exchange within the cryptocurrency ecosystem.

Current ranking and trading volume

As of the time of this report, HTX holds the 16th position among cryptocurrency exchanges in terms of daily trading volume. According to data from CoinMarketCap, the exchange recorded a total trading volume of $1.6 billion in the past 24 hours. This ranking and trading volume indicate that HTX remains a prominent player in the crypto trading sphere, despite the recent setbacks.

HTX’s security crisis calls for improved safeguards

Following the resumption of its services in November, Justin Sun, the individual linked to HTX, assured affected users that they would receive full compensation for the losses incurred through the exploit. Additionally, he stated that an investigation into the incident was underway.

In the past two months, HTX and other entities connected to Justin Sun, such as the cryptocurrency exchange Poloniex and the HTX Eco Chain (HECO) bridge, have fallen victim to hacking attacks on four separate occasions. The first hack targeted HTX, occurring less than two weeks after the exchange rebranded itself as HTX, resulting in an unknown attacker making off with nearly $8 million in cryptocurrency in September.

The recurring security breaches have raised significant concerns within the cryptocurrency community about the safety and resilience of platforms associated with Justin Sun. These incidents highlight the vulnerability of such exchanges and the need for enhanced security measures to protect user assets.

Investor reaction and implications

The substantial outflows from HTX following the November exploit indicate that investors are wary of the ongoing security issues plaguing the exchange and its affiliated entities. This lack of trust may have long-lasting implications for HTX’s reputation and ability to attract and retain users.

The recent exploits and subsequent outflows of funds from crypto exchange HTX have cast a shadow of doubt over the platform’s security and reliability. With multiple security incidents occurring within a short timeframe, investors are understandably concerned about the safety of their assets. 

These developments underscore the critical importance of implementing stringent security measures to safeguard the interests of users and restore confidence in the platform. As the crypto industry continues to evolve, the ability to address security challenges will be paramount for the success and longevity of any cryptocurrency exchange.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

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