The executive chairman and co-founder of Ripple, Chris Larsen, used social media to clarify recent reports suggesting that the payment protocol had been compromised.
Larsen’s hacked – Details about the hack and its consequences
Larsen revealed that several of his personal XRP accounts, distinct from those associated with Ripple, were subject to unauthorized access. Prompt action was taken to address the issue, including notifying exchanges to freeze the affected accounts, with law enforcement involvement already underway.
Yesterday, there was unauthorized access to a few of my personal XRP accounts (not @Ripple) – we were quickly able to catch the problem and notify exchanges to freeze the affected addresses. Law enforcement is already involved. https://t.co/T3HtKSlzLg
— Chris Larsen (@chrislarsensf) January 31, 2024
Prior to Larsen’s clarification, ZachXBT had shared data outlining the extent of the hack, which resulted in over $112.5 million worth of XRP being stolen and subsequently laundered through various platforms such as MEXC, Gate, Binance, Kraken, OKX, HTX, and HitBTC.
It appears @Ripple was hacked for ~213M XRP ($112.5M)
Source address
rJNLz3A1qPKfWCtJLPhmMZAfBkutC2QojmSo far the stolen funds have been laundered through MEXC, Gate, Binance, Kraken, OKX, HTX, HitBTC, etc pic.twitter.com/HKGYsLQeMv
— ZachXBT (@zachxbt) January 31, 2024
Market reaction to hacking and its consequences
The news of the hack led to a significant decrease in the value of XRP, with a decline of more than 5%, although the cryptocurrency managed to recover slightly, showing a 4% decrease by late Wednesday morning. Fortunately, it seems that accounts belonging to Ripple users were not affected by the breach at this time.
However, some social media users expressed dissatisfaction with Larsen’s response to the hack, questioning whether the information would have been disclosed if it hadn’t been reported by ZachXBT.
The problem of cybersecurity in the cryptocurrency environment
The incident involving Larsen’s accounts being compromised is part of a broader pattern of security challenges within the cryptocurrency space. Recent statistics from Immunefi indicate that nearly $127 million was lost to hackers and fraudsters in January 2024 alone, representing a significant increase compared to the previous year. DeFi platforms have been particularly targeted by hackers during this period.
Criticism of regulators and prospects for solving the problem
This event adds to the growing concerns surrounding cybersecurity within the cryptocurrency ecosystem. Just weeks before, the United States Securities and Exchange Commission (SEC) encountered a similar issue when its accounts were hacked shortly before the approval of spot bitcoin ETFs, drawing further attention to the vulnerability of digital assets.
Ripple CEO Brad Garlinghouse criticized the SEC chair, Gary Gensler, suggesting that his actions may not be in the best interest of the public or the long-term growth of the economy. Garlinghouse also hinted at ongoing tensions between Ripple and the SEC, referencing a previous legal dispute over whether XRP should be classified as a security.
Despite these challenges, Garlinghouse expressed optimism for potential changes in leadership within the SEC, believing it could lead to a more favorable environment for innovation and growth in the cryptocurrency industry.
