HTX Exchange Faces Second Attack, Loses $13.6M in Cross-Chain Exploit

Jimmy Aki
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Cryptocurrency exchange HTX has suffered an estimated loss of $13.6 million due to the exploitation of the HECO Chain bridge. This recent security breach follows a previous hack in September, during which the platform incurred an $8 million loss from a hot wallet breach.

Latest Exploit Stemmed From Three Compromised Hot Wallets

On November 22, the HECO Chain bridge, linking the HTX exchange (formerly Huobi) and Ethereum, fell victim to exploitation, resulting in the loss of $83.4 million in digital assets.

Lookchain, a reputable blockchain security firm, identified the movement of 42.11 million USDT, 10,145 ETH, and a wrapped version of Bitcoin (HBTC) from the bridge to a previously unused Ethereum wallet.

All stolen assets were exchanged for ETH, totaling 42,434 tokens valued at $83.4 million. Consequently, HTX suffered an estimated loss of $13.6 million as part of the $83.4M HECO Chain bridge exploits.

Blockchain forensics firm CyversAlert was the first to detect multiple suspicious transactions on a single hot wallet, leading to the compromise of funds, including ETH and USDT, amounting to a combined $12.4 million.

However, after further investigation, the chain security platform announced that three hot wallets were exploited, with an estimated loss of $13.6 million.

Stolen assets included over 1,240 ETH, 7.3 million USDT, 1.78 million USD Coin, and 62,200 LINK, which was quickly converted to Ethereum.

Justin Sun, the de facto owner of HTX and founder of Tron and BitTorrent, promptly announced compensation for all losses stemming from the compromised hot wallets. He assured concerned traders and investors that all deposits and withdrawals on the exchange were temporarily suspended, emphasizing the security of all funds.

HTX, in collaboration with HECO Chain Bridge, has devised a strategy to recover the funds lost in the recent cyber attack. As part of this effort, they have announced a funded bounty program.

This bounty is designed to incentivize and reward individuals or organizations who successfully identify the hacker or cyber attack group responsible for the recent exploits.

A Reoccurence of HTX’s Previous Hot Wallet Attack

Prior to the rebranding from Huobi to the HTX exchange, the platform encountered a cyber attack on September 25, resulting in the exploitation of 5,000 ETH tokens valued at around $8 million.

CyberAlerts stated that the attack was successful due to the compromise of one of the exchange’s hot wallets.

Sun confirmed the attack in an X update, stating that HTX has fully recovered all losses incurred and successfully resolved all issues.

In response, HTX promised to reward hackers with a 5% ( about $400,000) bonus if stolen funds are returned.

These recent attacks on HTX echo similar incidents in the blockchain space. On June 24, 2022, Harmony Bridge fell victim to an attack, resulting in a $100 million drain due to the compromise of two hot wallet addresses.

Cryptocurrency market maker Wintermute also suffered bridge attacks, leading to a loss of $160 million on September 20, 2022.

These attacks exemplify the soaring threats hackers pose to chain bridges. As bridges facilitate smooth transfers of more assets, they are prone to attacks due to their lax security controls.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.