HTX sees $258 million outflow after resuming post-hack operations

abdelaziz Fathi

Crypto exchange HTX (formerly known as Huobi Global) saw a substantial $258 million in net outflow since it resumed operations on November 25, following a major security breach.

Justin Sun

Data from DefiLlama indicates that this outflow occurred between the exchange’s restart and December 10, signaling possible concerns among clients about the platform’s security.

The breach, which resulted in the loss of $30 million worth of crypto tokens, led HTX to temporarily suspend withdrawals and deposits. An HTX spokesperson has since downplayed the severity of the outflow, calling it “a small fraction of our total reserves” and asserting the platform’s stability and robustness. He reaffirmed HTX’s commitment to offering a “secure and seamless” trading experience.

Justin Sun, linked to both HTX and the Poloniex platform, has faced a series of security challenges. Poloniex and HECO Bridge, a network established by HTX for blockchain transfers, were also victims of hacking incidents in November, cumulatively losing about $200 million in cryptocurrency.

Following the November incident at HTX, Sun assured stakeholders in a statement that the exchange would fully compensate for the losses from its hot wallet. This was not the first security breach for HTX; in September, hackers stole $8 million from the platform, although security firm BlockSec reported that this amount was recovered.

HTX, with an average trading volume of $1.6 billion in the past 24 hours, ranks among the top 20 crypto exchanges, according to CoinMarketCap. The exchange’s reserve composition is diverse, with Bitcoin accounting for about 33%, TRX tokens from the Tron blockchain (launched by Sun in 2017) comprising 32%, and the exchange’s own HT coin and a Sun-backed token called stUSDT forming a significant part of the reserves.

Sun has been embroiled in legal issues in the U.S., facing SEC allegations of fraud and market manipulation related to the TRX token. Sun has publicly contested these allegations, claiming the lawsuit “lacks merit.”

The founder of the Tron blockchain protocol said in October that scored a profit of $98 million during the third quarter, despite various challenges in the crypto space.

In a social media post, Sun shared that HTX, along with associated companies, generated a total of $202 million in revenue during the three months through September 2023. However, expenses of $104 million were incurred, resulting in a net profit of $98 million for the quarter.

Looking ahead to the fourth quarter, the de facto owner anticipates revenues of $190 million, with expenses of $88 million, resulting in an estimated profit of $104 million.

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