HTX Exchange faces US$258 million net outflow following major hack

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11th December 2023 – (Hong Kong) HTX, a digital-asset trading platform associated with Chinese entrepreneur Justin Sun, has faced a net outflow of $258 million since resuming operations after a significant hack. Data from DefiLlama reveals that the funds left the exchange between its restart on November 25 and December 10, indicating that some clients were unsettled by the security incident that occurred the previous month. HTX reported a loss of $30 million worth of crypto tokens during the breach and temporarily suspended withdrawals and deposits in response.

Requests for comments regarding the outflows from the exchange, directed at both HTX and a spokesperson for Justin Sun, went unanswered at the time of reporting.

Justin Sun is also connected to the Poloniex exchange and the HECO Bridge, a network established by HTX to facilitate transfers between blockchains. Both Poloniex and HECO were targeted by hackers in November, resulting in the theft of approximately $200 million in cryptocurrency. Following the HTX incident in November, Sun stated in a post on X that an investigation was underway and assured that the exchange would fully compensate for the hot wallet losses suffered. The platform was also subject to an $8 million theft by hackers in September.

Despite the security breaches, HTX, formerly known as Huobi, has maintained its position as one of the top 20 cryptocurrency exchanges by trading volume. According to CoinMarketCap figures as of 6:25 p.m. on December 10 in Singapore, HTX recorded an average trading volume of $1.6 billion in the past 24 hours.

In the wake of the collapse of the FTX platform, which revealed significant discrepancies in its books, digital-asset investors have become more vigilant in monitoring flows and reserves at virtual-currency exchanges.

DefiLlama data shows that Bitcoin makes up the largest portion of HTX’s reserves, accounting for approximately 33%. The TRX token from the Tron blockchain, which Sun launched in 2017, represents around 32% of reserves. HTX’s exchange coin HT comprises about 14%, followed by a Sun-backed token named stUSDT, which accounts for 12% of the reserves.

Notably, TRX has been at the centre of fraud allegations against Sun in the United States. The Securities and Exchange Commission filed a lawsuit in March, accusing Sun and his companies of market manipulation to create the illusion of active TRX trading. Sun dismissed the suit’s merits in a tweet during that time.

Security firm BlockSec has reported that HTX managed to recover the $8 million stolen in September. However, hackers still appear to have control over the $30 million taken during the recent breach, according to BlockSec’s findings.