XT.com, a Seychelles-based cryptocurrency exchange, has halted withdrawals following a suspected $1.7 million security breach. The exchange, which manages daily trading volumes of approximately $3.4 billion, attributed the suspension on November 28 to ongoing “wallet upgrade and maintenance,” causing widespread user concern about fund safety.
“Due to the wallet upgrade and maintenance, XT has suspended all coin withdrawals. Sorry for the inconvenience caused during the suspension,” by Exchange
PeckShield Claims $1.7 Million Breach
Blockchain security firm PeckShield reported that XT.com suffered a $1.7 million cryptocurrency theft. The suspected hacker converted the stolen funds into 461.58 Ether (ETH), which remains in an Ethereum wallet identified by PeckShield. The firm shared these details via a public alert, providing transparency about the ongoing incident.
In response, XT.com issued “abnormal transfers” of its wallet assets but assured users that their holdings were safe. The exchange emphasized its 1.5x reserve policy to safeguard user assets and restore confidence amidst this troubling development. This incident marks a significant blow to the platform’s reputation, which was launched in 2018 to facilitate over 1,000 digital currency trades.
The exchange pledged to improve transparency by introducing a Merkle tree proof of reserves by mid-December. This move aims to bolster user confidence in the platform’s financial stability while ensuring a robust response to security challenges faced by the crypto sector.
Broader Crypto Sector Security Concerns
The intrusion into the XT.com website adds to the long list of hackings of virtual currency exchange systems. In September, BingX and Indodax suffered losses of $43 million and $22 million, respectively. Such occurrences emphasize the existing weaknesses in the crypto infrastructure, where phishing and hacks have caused drastic global damage.
Last week in the US, Prosecutors are said to have charged 5 persons said to be connected in a crypto hacking endeavor that involved $ 11 million. Such schema operated in several regions across the globe where people and organizations were targeted with phishing schemes to acquire sensitive credentials. Such individuals were crypto exchanges and users where one individual is reported to have lost more than $ 6.3 million in digital coins.
Despite all the disturbing scenarios, as is the case here, XT.com holds that the users’ funds are still SAFU (Secure Asset Fund for Users). The exchange stated that these absorbed assets were for the rest of its reserves. Despite everything, XT.com continues its operations while addressing its customers’ concerns about its focus on the cloud with higher transparency and security systems.
This incident is a warning to the cryptocurrency sector, demonstrating the need for stronger security protocols. As more crypto solutions and exchanges are adopted into the industry, the challenges will mainly protect user assets and the exchange’s reputation.
Read Also: Van Eck Reaffirms $180,000 Bitcoin Target Amid Bullish Momentum
