HTX Experiences Net Outflow of $258 Million After Hack
Cryptocurrency exchange HTX, formerly known as Huobi, has seen a net outflow of around $258 million since it was hacked and approximately $30 million was stolen from its hot wallets last month. This suggests that investors are reacting to the security issues faced by the exchange.
HTX’s History of Hacks
On November 22, HTX and Heco cross-chain bridge, which connects the exchange to the Ethereum network, suffered an attack resulting in the loss of over $116 million in crypto assets. Following this incident, HTX advisor Justin Sun announced that affected users would be fully compensated for their losses.
Before this hack, HTX experienced another security breach in September where $8 million worth of assets were stolen. However, these assets were eventually returned after negotiations with the hacker.
In addition to HTX, Poloniex, another digital asset exchange linked to Justin Sun, was hacked in mid-November with funds worth $125 million stolen. While the stolen assets could not be recovered, Sun assured affected users that they would receive reimbursement through an airdrop.
Concerns Over Asset Safety
The consecutive hacks on platforms linked to Justin Sun have raised concerns about the safety of user assets. The outflows from HTX indicate that users are becoming uncertain about the security measures implemented by these platforms.
Potential Alarm: HTX’s Reserves
In addition to the security issues, there is also potential cause for alarm regarding HTX’s reserves. Data from DefiLlama shows that Sun-linked tokens now make up over 50% of HTX’s assets. At the beginning of the year, well-known cryptocurrencies like Bitcoin, Tether, and Wrapped Ether comprised the majority of the reserves. However, as of December 8, TRX, HT, and stUSDT (another asset tied to Sun) make up more than 58% of HTX’s reserves.
Hot Take: Users Losing Confidence in HTX’s Security
The net outflow of $258 million from HTX following its recent hack indicates that users are losing confidence in the exchange’s security measures. The consecutive hacks on platforms linked to Justin Sun, along with the shift in HTX’s reserves towards Sun-linked tokens, have raised concerns about the safety of user assets. It remains to be seen how HTX will address these issues and regain the trust of its users.
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